ease term, on January 1, 2022, they were well paying $10,000 annually every January 1 for the next 7. The present value of the 8 lease payments on January 1, 2022 with a rate of 8% was $62,000. How much is the interest expense of the lease in the year 2022?
Q: Monty Company's reported 2023 net income of $161,320 was based on sales of $639,000, cost of goods…
A: Cash flows from operating activities shows the cash receipts and payments which are received or paid…
Q: Assets Cash Total Accounts receivable Inventory Equipment Accumulated depreciation-equipment Total…
A: Operating expenses are defined as the payments made by a business entity to execute its routine…
Q: 11) On January 1, 2012 Peter Inc. acquired 80% of the outstanding common stock of Sam Co. for…
A: At the time of acquisition of stake in a Company, the assets are taken over at Fair Value and basis…
Q: Beech Soda, Inc. uses a perpetual inventory system. The company's beginning inventory of a…
A: Weighted Average Method :— It is one of the method of inventory valuation in which average cost per…
Q: Use the expanded accounting equation to compute the missing financial statement amounts. Common…
A: The accounting equation is a mathematical representation of financial transactions. The accounting…
Q: Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter.…
A: Fixed cost is the cost which remains constant even when the production level changes. Whereas…
Q: a) Prepare a production budget for May & June for OldX and NewX b) Prepare a materials (Component…
A: *Old X ending inventory= 10% of next month's sales *New X ending inventory= 20% of next month's…
Q: Lemon Ltd has a December 31 year end. On January 1, 2018 Lemon acquires 4000 shares of Nike Inc at…
A: A journal entry is the act of keeping or producing records of any economic or non-economic…
Q: Juan Dela Cruz is a production manager in a manufacturing company. He recently instructed e…
A: Ethical Issues in Business When a choice, action, or circumstance goes against the organization's or…
Q: Use P6-1A Excel sheet Mitsui corporation is a major distributor of school portables. All sales have…
A: Special Journal is basically a books of Prime entry wherein some specific transactions are recorded…
Q: Which product should be processed further to maximize profit?
A: If products are sold at split of point Particulars poh Taeh Toh Sales in units…
Q: a. The owner's initial investment consists of $36,570 cash and $46,080 in land in exchange for its…
A: In the given question, we need to prepare a Statement of cash flows under direct method( as the…
Q: How long will it take for Php15,000 to accumulate to Php25,000 at 12% compounded quarterly? 4.
A: COMPUND INTEREST Compound interest is the interest calculated on the principal and the interest…
Q: Kendell Cooper Optical Dispensary completed the following transactions during the latter part of…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: Paper Company acquired 80 percent of Scissor Company’s outstanding common stock for $296,000 on…
A: Journal entries are the primary entries that are recorded in the financial transactions initially.…
Q: haroah Enterprises is considering manufacturing a new product. It projects the cost of direct…
A: Variable Cost : It is considered as the cost which varies with the level of production.…
Q: NoDelay Delivery Corporation included the following disclosure note in an annual report: Stock-Based…
A: Employee Stock Option Plan: An employee stock option plan, often known as an employee stock…
Q: Analyzing and Computing Average Issue Price and Treasury Stock Cost Following is the stockholders'…
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: the
A:
Q: Gall Schneewels is a nurse at Central City Hospital. She is paid $32.87 per hour and has a 40-hour…
A: Gross pay of the employee includes the normal pay and overtime pay. Overtime pay is the extra…
Q: Company P purchased an 80% interest in Company S on January 1, 2016, for $800,000. On the purchase…
A: The amortization deduction is taken over the useful life of the asset, which is generally the period…
Q: Mr. Juan Lopez launched Lopez Fiesta Mart on December 1, 2022 with a cash investment of ₱220,000.…
A: Adjusted Trial Balance The general ledger account balances are shown in an adjusted trial balance…
Q: Twenty sets of office furniture are purchased with a down payment of Php90,000 and the ce at…
A: The monthly installments carry the payment of principal amount and payment for the interest also but…
Q: Stark company has the following adjusted accounts with normal balances at its December 31 year-end.…
A: Income Statement :— It is one of the financial statement that shows profitability of company during…
Q: The Marchetti Soup Company entered into the following transactions during the month of June: (1)…
A: Accounting equation is the basic equation based on which the business transactions are recorded. The…
Q: In two years Boris plans to enroll at Cleese University, a prestigious university in the Pacific…
A: Answer : Current Tuition fee = PV = $23,500 Interest rate = r = 6% Future value = PV ( 1+r)^time
Q: 5) Buffett Company has the following information: Direct Labor Costs WIP, Ending FG, Beginning…
A: Lets understand the basics. Cost of goods sold is a cost for selling the goods to the customer. It…
Q: eventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares…
A: Introduction:- Dividends derived from portion of a company's profits. Which are distributed to…
Q: [The following information applies to the questions displayed below.] Caro Manufacturing has two…
A: The question is based on the concept of Cost Accounting.
Q: [The following information applies to the questions displayed below.) At the beginning of the year,…
A: Introduction: In accounting, capitalizing implies recognizing an expense as an asset. The cost of…
Q: Empty Fields Company pays its salaried employees monthly on the last day of each month. The annual…
A: Social Security Tax Benefits are provided by the Social Security programme to retirees and others…
Q: Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each…
A: A bad debt expense is recognized when a receivable is no longer collectable as a consequence of a…
Q: QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues…
A: Differential revenue = Alternative B revenue - Alternative A revenue
Q: Pear, Inc. generates a $100,000 net operating loss in 2022. Plum, Inc. generates $500,000 of taxable…
A: To merge the assets, liabilities, and other financial aspects of two or more separate businesses…
Q: P4.2 (LO 1) Excel (Balance Sheet Preparation) Presented below are a number of balance sheet items…
A: The balance sheet is a summary of permanent accounts prepared at the end of the accounting period.…
Q: At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $120 million…
A: A journal entry is utilized to record a business deal in a company's accounting records. A journal…
Q: [The following information applies to the questions displayed below.] The following data were…
A: An income statement is prepared by the organization to reflect the income generated and expenses…
Q: Prepare the necessary journal entries for the following dates for Rodney Inc.
A: Service rendered to be recognised when it is provided. Rodney Inc has provided service to Smith Co.…
Q: Mark Bennett, D.D.S., opened an incorporated dental practice called Mark Bennett Professional…
A: The process of recording business transactions in the books of accounts for the first time is…
Q: Study the following transactions that occurred during August 2022 for Renwick & Co. Aug 2 – Renwick…
A: The question is asked to prepare the journal entries with respect to the financial information. Net…
Q: Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2021: Sales quantity…
A: Break-even sales is the point of unit sales where the net income is $0. Any sale above break-even…
Q: O O owners' equity. O profits. assets.
A: Lets understand the basics. Bank has sole purpose of obtaining deposits from the customer, paying…
Q: Ruth formed an equal profit and loss Partnership with Joyce by contributing Land that had an…
A: Fair market value of Ruth's land =$45000 Debt against it = $19000 Cash share = $35,000 Joyse Land =…
Q: What are depreciation and its purpose? Does the book value of a fixed asset (cost minus accumulated…
A: Depreciation is an expense which shows the decrease in the asset's value over the life of the asset…
Q: 9. Every six months for 5 years, a father places Php8,200 in a trust fund for his only child's…
A: As per the given information: Principal amount - Php8,200 Rate of interest - 12% compounded…
Q: In your initial audit of Beta Co., you find the following ledger account balances, Debit Credit 18%,…
A: Bond redemption is the repayment of the principal amount of bonds. Accrued interest is the amount of…
Q: 16) Rainbow Co. owns the following investment in other companies. Green Co. Red Co. Blue Co Select…
A: Consolidated accounts means the financial statements of group companies presented together by…
Q: ich the following onscreen Vendors and Expenses transaction forms typically should be prepared.…
A: The payments are done to the vendors in the order bills and invoices are received and they are paid…
Q: Analyze the trends and factors that determine Astro Berhad Malaysia in 2022 that need for the debt…
A: The debt to equity ratio, also known as the "debt-equity ratio," "risk ratio," or "gearing," is a…
Q: Accounting The shareholders' equity section of Sweet Acacia Corporation at January 1, 2024, included…
A: Stockholder's Equity - Stockholder's Equity contains common stock, Preferred Stock, and Retained…
Xennes Corp rented a piece of equipment for the 8 years of its useful life, agreeing to pay 10,000 at the beginning of the lease term, on January 1, 2022, they were well paying $10,000 annually every January 1 for the next 7. The present value of the 8 lease payments on January 1, 2022 with a rate of 8% was $62,000. How much is the interest expense of the lease in the year 2022?
A) 5,200
B) 4,160
C) 6,200
D)4,960
Step by step
Solved in 2 steps
- Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.
- Carla Vista Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2023, that requires 6 annual payments of $25,500 each, beginning September 1, 2023. In addition, Carla Vista guarantees the lessor a residual value of $14,900 at lease end. The equipment has a useful life of seven years. Assume an interest rate of 12%. (Use tables below, a financial calculator, or Excel functions.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Prepare a schedule contrasting the journal entries prepared using a guaranteed residual value with those using an unguaranteed residual value. Include in your schedule entries on August 31, 2024, for the year-end accrual of interest in the lease obligation and the recording of annual depreciation expense using the straight-line method and assuming no residual value. (List all debit entries before credit entries. Credit account titles are automatically…On January 1, 2025, Haystack, Inc. leased equipment to Silver Point Company. The equipment had a cost and fair value of $780,000. The 5-year lease calls for equal annual payments at the beginning of each year. The equipment has an expected useful life of 5 years. The rate implicit in the lease is 8% but the lessee's incremental borrowing rate is 10%. What are the equal annual lease payments the lessor will charge? (Round to whole dollars) L The present value of an ordinary annuity at: 10% for 5 periods is 3.79079 8% for 5 periods is 3.99271 The present value of an annuity due at: 10% for 5 periods is 4.16986 8% for 5 periods is 4.31213 The present value of a single sum of $1 at: 10% for 5 periods is .62092 8% for 5 periods is .68058 O A. $181,972 OB. $180,885 OC. $175,820 OD. $195,356 O E. $162,795Cullumber Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2023, that requires 6 annual payments of $38,000 each, beginning September 1, 2023. In addition, Cullumber guarantees the lessor a residual value of $27,000 at lease end. The equipment has a useful life of seven years. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE OF 1. (a) Using (1) tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the capital lease and prepare Cullumber's September 1, 2023 journal entry assuming an interest rate of 12%. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.)…
- On January 1, 2018, This Co. leased an asset with fair value of P800,000 from Joyce Co. for a lease term of 6 years. The lease specifies equal annual payments beginning on January 1, 2018. The lessee guarantees a P100,000 residual value of the asset at the end of the lease term. The rate implicit on the lease is 9%. How much is the annual lease payment?On January 1, 2022, Buffet Trading Corp. leased machine by signing a 4-year lease contract. Annual rental is P1,742,174 payable at the beginning of each year starting January 1, 2022. Buffet guarantees the residual value of P1,200,000 at the end of the lease term. The asset’s useful life is 5 years, at the end of which, its residual value is estimated to be P80,000. Buffet uses straight-line depreciation. The interest implicit in the lease is 10%. Present value of annuity due of 1 for 4 periods at 10% is 3.48685. Present value of 1 at 10% for 4 periods is 0.68301 What is the carrying value of the right-of-use machine on December 31, 2022?On January 1, 2021, Flackmon Company entered into a lease for a truck with a payment of S16,000 per year for 4 years. The expected life of the truck is 5 years, and the first payment will be made immediately. Flackmon could obtain a loan for a similar amount at a rate of 8% per year. Required: A. Record the lease liability and the first payment on January 1, 2021. B. Record the amortization on the leased asset for 2021. C. Record interest for 2021 on the lease. D. Record the lease payment on January 1, 2022. Your answers to this open-ended assignment should be placed in the space below this line. A Date Account Name Debit Credit Jan. 1, 2021 1-Jan-21 B Date Account Name Debit Credit Dec. 31, 2021 C Date Account Name Debit Credit Dec. 31, 2021 D Date Account Name Debit Credit Jan. 1, 2022
- ABC Company is the lessee and will lease an asset owned by XYZ Company. The semi-annual cash payments, required to be made by ABC, are $500,000. The lease goes for 5 years, and starts on January 1, 2021. Assume a capital lease. The periodic payments are due on June 30 and December 31 of each year. ABC uses an interest rate of 10%. What is the present value of the lease payments? $3,860,867 $1,895,393 $3,790,787 $5,000,000ABC Inc. leases equipment for 10 years. The annual lease payment is $8,000. The interest rate for a 10-year collateralized loan for ABC is 8%. Which of the following is correct? I The expenses related to the lease in year 1 will be greater if the lease is accounted for as a finance lease than if the lease is accounted for as an operating lease. II The total expenses over the 10-year life of the lease if the lease is accounted for as a finance lease will equal the total expenses over the 10-year life of the lease if the lease is accounted for as an operating lease. III The company will record interest expense if the lease is accounted for as a finance lease but not if the lease is accounted for as an operating lease. Select one: a. I, II and III b. I and II c. I and III d. II and III e. IOn December 31, 2022, Sunland Corp. leased a machine from Eastern Star Ltd. for a five-year period. Annual lease payments are $318000 (including $14000 annual executory costs), due on December 31 each year. The first payment was made on December 31, 2022, and the second payment on December 31, 2023. The appropriate interest rate for this type of lease is 10%. The present value of the minimum lease payments at the inception of the lease (before the first payment) was $1267680. The lease is being accounted for as a finance lease by Sunland. On its December 31, 2023 statement of financial position, Sunland should report a lease liability of O $207632. Ⓒ$756048. O $963680. O $96368.
