What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or afinancial calculator to arrive at your answer. (Round final answer to 3 decimal places, e.g. 1.234%.)%Effective interest rate Crane Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year usinga variety of financing alternatives.Assets 1 and 2These assets were purchased together for $124,000 cash. The following information was gathered:DepreciationInitial Cost onto Date onBook Value onAppraisedDescriptionSeller's BooksSeller's BooksSeller's BooksValueMachinery$115,000$52,000$63,000$90,000Equipment69,00010,00059,00030,000Asset 3This machine was acquired by making a $11,000 down payment and issuing a $32,800, two-year, zero-interest-bearing note. The noteis to be paid off in two $16,400 instalments made at the end of the first and second years. It was determined that the asset could havebeen purchased outright for $37,700.

Interest rate refers to the desired percentage of the rate imposed by an entity or any financial…

Answered: hancial calculator to arrive at your…

Business

Accounting

hancial calculator to arrive at your answer. (Round final answer to 3 decimal p % Effective interest rate

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 1SEB

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