1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mestny [16]
1 year ago
10

On January 2, 2021, Hernandez, Inc. signed a ten-year noncancelable lease for a heavy duty drill press. The lease stipulated ann

ual payments of $300,000 starting at the beginning of the first year, with title passing to Hernandez at the expiration of the lease. Hernandez treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Hernandez uses straight-line depreciation for all of its plant assets. Aggregate lease payments were determined to have a present value of $1,800,000, based on implicit interest of 10%. In its 2021 income statement, what amount of interest expense should Hernandez report from this lease transaction
Business
1 answer:
Sauron [17]1 year ago
3 0

The amount of interest expense should Hernandez report from this lease transaction is $150,000.

<h3>Interest expense</h3>

Depreciation expenses=Present value-Scrap value/Estimated useful life

Depreciation expenses=$1,800,000-$0/15

Depreciation expenses=$120,000

Interest expenses

Interest expenses=Depreciation expenses+(Annual payments×Implicit interest)

Interest expenses=$120,000+($300,000×10%)

Interest expenses=$120,000+$30,000

Interest expenses=$150,000

Inconclusion the amount of interest expense should Hernandez report from this lease transaction is $150,000.

Learn more about interest expense here:brainly.com/question/2151013

You might be interested in
In 2018, Sheridan Company had credit sales of $894000. On January 1, 2018, Allowance for Doubtful Accounts had a credit balance
Fantom [35]

Answer:

$37,100

Explanation:

The computation of the adjustment made to Allowance for Doubtful Accounts  is shown below:

= Ending account receivable balance × uncollectible percentage - credit balance of Allowance for Doubtful Accounts + written off amount

= $235,000 × 10% - $22,300 + $35,900

= $23,500 - $22,300 + $35,900

= $37,100

We simply applied the above formula so that the adjustment amount could arrive

4 0
3 years ago
Pell Corporation manufactures computers. Assume that Pell allocates manufacturing overhead based on machine hours estimated 10,0
Contact [7]

Answer:

exist 139,200

Explanation:

Assume that Pell allocates manufacturing overhead based on machine hours, estimated 10,000 machine hours and exist 87,000 that implies that the standard cost per machine hour = exist 87,000 / 10,000 = 8.7 exist

Therefore the manufacturing overhead costs if Pell actually used 16,000 machine hours will be: 16000 x 8.7 = exist 139,200

8 0
3 years ago
Melanie needs to ensure that readers are able to locate specific sections within a document easily. What should she include in t
frutty [35]

Answer:

table of contents

Explanation:

Table of contents, usually put at the beginning or end of a document, lists the chapter and section of the document, together with their page numbers. This is the widely used method that makes literature more readable and searchable.

So, Melanie needs to create a table of contents, so her readers will be able to find specific sections after glancing at it.

3 0
3 years ago
Read 2 more answers
A 3/1 ARM is made for $150,000 at 7% with a 30 year maturity. Assuming that fixed payments are to be made monthly for three year
sveticcg [70]

Answer:

Monthly paymenty for  $ 997.954

Explanation:

We have to calcualte for the PTM of the mortgage for the first three years at which the rate is fixed:

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV $150,000

time 360 (30 years x 12 months)

rate 0.005833333 (7% annual / 12 months)

150000 \div \frac{1-(1+0.005833)^{-360} }{0.005833} = C\\

C  $ 997.954

8 0
3 years ago
How does a cookie work?
galina1969 [7]

I believe you eat it.

7 0
2 years ago
Read 2 more answers
Other questions:
  • Why is hazard city at more risk for lahars than hutton or wrightstown, even though they are closer to lava mountain than hazard
    13·1 answer
  • Intel, an American company, has manufacturing plants in China that assemble U.S. made components. Suppose one of these plants pr
    8·1 answer
  • Economists make assumptions in order to Select one: a. mimic the methodologies employed by other scientists. b. minimize the num
    14·1 answer
  • While George travels for two months, Mary agrees to housesit and care for George's three horses at her stables. The parties agre
    7·1 answer
  • A price floor that is set above the normal equilibrium price will lead to: A. An decrease in consumer surplus, a decrease in pro
    6·1 answer
  • Simply wearing a lap-and-shoulder belt combination can cut your chance of being killed by ____________.
    15·2 answers
  • Bonner Corp.'s sales last year were $345,000, and its year-end total assets were $355,000. The average firm in the industry has
    10·1 answer
  • Define national security​
    10·2 answers
  • What is technical profession?Give examples.​
    8·1 answer
  • Creating your own flyer about cars
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!