using capital expedentures 460762

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