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Libby Company purchased equipment by paying $5,000 cash on the purchase date and agreeing to pay $5,000 every six months during the next four years; the first payment is due six months after the purchase date. Libby's incremental borrowing rate is 8%. At what amount would the liability be reported on the balance sheet as of the purchase date, after the initial $5,000 payment was made?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9972775

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