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4 October, 17:42

Gold Co. purchased equipment from Marshall Co. on July 1. Gold paid Marshall $10,000 cash and signed a $100,000 noninterest-bearing note payable, due in three years. Gold recorded a $24,868 discount on notes payable related to this transaction. What is the acquired cost of the equipment on July 1?

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  1. 4 October, 21:32
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    The acquired cost of the equipment on July 1 is $85,132

    Explanation:

    The computation of the acquired cost is shown below:

    = Cash + Net note payable amount

    = $10,000 + $75,132

    = $85,132

    where,

    Notes payable amount equals to

    = Non-interest-bearing note payable - discounts on notes payable

    = $100,000 - $24,868

    = $75,132

    For computing the accurate answer we have to deduct the discount from the note payable amount and then added to thee cash amount
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