Danville Corporation bought a new machine and agreed to pay for it in equal annual installments of $6,000 at the end of each of the next five years. Assume the prevailing interest rate for this type of transaction is 12%. Assume the present value of an ordinary annuity of $1 at 12% for five periods is 3.60 . The future amount of an ordinary annuity of $1 at 12% for five periods is 6.35 . The
present value of $1 at 12% is 0.567 . How much should Danville record as the note payable on the balance sheet if financial statements were prepared today?
a. $17,010
b. $21,600
c. $30,000
d. $38,100
B
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