Blake Company incurred the following equipment related costs:
Purchase of factory equipment ($27,000 list price. $2,000 cash discount given)
25,000
Installation charges related to factory equipment
15,000
Repainting executive offices
5,000
Buying land for new office building
100,000
General contractor’s fee on new office building
40,000
Cost of regularly scheduled maintenance on new factory equipment
6,000
Cost to put in parking lot for office building
30,000
Cost to wire new building
14,000
Cost of major remodel of factory
150,000
Determining classification of debt as of 12/31/08
Current
Long term
$100,000 note at 7% interest, payment terms are $10,000 (plus interest) per year for the next 10 years. Borrowed 11/1/08. First payment due 10/31/08
$350,000 note at 7% interest, due in equal annual installments of $85,362. Borrowed 7/1/08. First payment due 6/30/09
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