On April 1, 2016, Bennett Corporation purchased a new machine on a deferred payment basis. A down payment of $5,000 was made and 10 monthly installments of $14,000 each are to be made beginning on May 1, 2016. The cash equivalent price of the machine was $130,000. Bennett incurred and paid installation costs amounting to $6,000. The amount to be capitalized as the cost of the machine is

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The cost to be capitalized for the machine includes the cash equivalent price of the machine ($130,000) plus the installation costs ($6,000), totaling $136,000. The deferred payment terms and down payment do not affect the capitalized cost since the cash equivalent price is given.

On April 1, 2016, Bennett Corporation Purchased a New Machine