1.On January 1, 2013, The Barrett Company purchased merchandise from a supplier. Payment was a noninterestbearing note requiring five annual payments of $20,000 on each December 31 beginning on December 31, 2013, and a lump sum payment of $100,000 on December 31, 2017. A 10% interest rate properly reflects the time value of money in this situation.
Required:
Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2013.