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
Rus_ich [418]
3 years ago
5

Wildhorse Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6 annual payments of $40,100

each, beginning December 31, 2019. In addition, Wildhorse guarantees the lessor a residual value of $20,300 at the end of the lease. However, Wildhorse believes it is probable that the expected residual value at the end of the lease term will be $10,150. The equipment has a useful life of 6 years. Prepare Wild Horses' December 31, 2019, journal entries assuming the implicit rate of the lease is 11% and this is known to Wildhorse
Business
1 answer:
olga55 [171]3 years ago
3 0

Answer:

31-Dec-19

Dr. Lease receivables  $ 180,498

Cr. Sales revenue         $180,498

Dr. Cost of goods sold  $ 170,000

Cr. Inventory          $ 170,000

Explanation:

The lease is recorded on the present value of all the payment to be made in the future.

We will use the present value of annuity formula

Present value of Lease = P [ ( 1 - ( 1 + r )^-n ) / r ]

where

P = annual payment = $40,100

r = implicit rate = 11%

n = numbers of payments = 6 payments

Placing values in the formula

PV of Lease = $40,100 x [ ( 1 - ( 1 + 11% )^-6 ) / 11% ] = $169,645

Now calculate the present value of guarantee residual value

PV of guarantee residual value = $20,300 x ( 1 + 11%)^-6 = $10,853

Fair value of lease = Present value of Lease payment + Present value of guarantee residual value

Fair value of lease = $169,645 + $10,853 = $180,498

Cost of equipment will be recorded in the cost of goods sold and Inventory as well.

We will pass two separate journal entries first to record the lease receivable and second to record the cost of the equipment.

You might be interested in
The major parts of the Stockholders' Equity section of the balance sheet are
torisob [31]

The correct answer is choice D.

The Stockholders’ Equity section of the balance sheet includes stock, paid-iin capital and retained earnings.

5 0
3 years ago
The _____ was established by Congress to encourage American firms to focus on quality improvement in order to improve their glob
V125BC [204]

Answer:

The correct answer is: Baldridge Performance Excellence Program.

Explanation:

To begin with, the <em>"Baldridge Performance Excellence Program"</em> is the name given to the program that was established by the United States of America in order to encourage the companies of the country to improve their performance regarding the economy and the globalization that was happening at the time the program was created. It receives its name from the ex secretary of commerce Malcom Baldridge and the award gives to the company selected the recognition of having performance excellence in the its field  

5 0
3 years ago
A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On
pychu [463]

Answer:

The correct answer is C

Explanation:

The amount of cash paid on July 8 is computed as:

Amount of goods worth = Purchased amount - Returned goods worth  Amount of goods worth = $1,800 - $200

Amount of goods worth  = $1,600

As the amount is paid within the terms of 10 days, so the amount is eligible for the discount of 2%, it is as:

Amount to be paid in cash = Amounts of goods worth - ( Amounts of goods worth × Discount)

where

Amounts of goods worth is $1,600

Discount is of 2%

Putting the values above:

Amount to be paid in cash = $1,600 - ($1,600 × 2%)

Amount to be paid in cash = $1,600 - 32

Amount to be paid in cash = $1,568

8 0
3 years ago
your client has made all of the following transfers. which of these transfers will be excluded from the client's total gifts in
OlgaM077 [116]

To be excluded from the client's total gifts in the year made are

  • Paid a hospital $11,000 for medical services rendered to a friend
  • Made a donation to the democratic party. Option D I and III

This is further explained below.

<h3>Which of these transfers will be excluded from the client's total gifts in the year made?</h3>

Generally, If anything is referred to as "the client's," it means that it belongs to a single person, such as a client's file. The use of the clients' plural possessive demonstrates that we may attribute things to more than one client.

In conclusion, To be excluded from the client's total gifts in the year made are

  • Paid a hospital $11,000 for medical services rendered to a friend
  • Made a donation to the democratic party. Option D I and III

Read more about client's

brainly.com/question/28162297

#SPJ1

CQ

Your client has made all of the following transfers. Which of these transfers will be excluded from the client's total gifts in the year made?

Paid a hospital $11,000 for medical services rendered to a friend

Paid a family member $15,000 so she could go to school

Made a donation to the democratic party

Made a contribution to the shriner's hospital, which provides free medical care to children

A)

II and IV

B)

I and II

C)

III and IV

D)

I and III

5 0
2 years ago
Ellis issues 8.0%, five-year bonds dated January 1, 2018, with a $530,000 par value. The bonds pay interest on June 30 and Decem
Ket [755]

Answer:

1. Total interest rate is $166,790

2. Refer to the attached file for the straight-line amortization table for the bonds' life.

3.

To record interest rate paid in 30th June 2018:

Dr Interest expenses                            16,679

Dr Premium on bond payable             4,521

Cr Cash                                                 21,200

To record interest rate paid in 31st Dec 2018:

Dr Interest expenses                            16,679

Dr Premium on bond payable             4,521

Cr Cash                                                 21,200

Explanation:

Total interest rate as followed : Interest payment - Premium on bond payable = 530,000 x 8% /2 x 10 - (575,210 - 530,000) =166,790.

6 0
3 years ago
Other questions:
  • Which statement best explains how manufacturers contributed to the economic slowdown that led to the Great Depression? a They we
    10·1 answer
  • Which of the following would not be an adjustment to net income using the indirect method? An increase in accounts receivable. A
    8·1 answer
  • Dennis took 12 index card and wrote the number 1 -12 on them what number collected the cards,shuffled them , and drew one card f
    9·2 answers
  • DWK Foods has developed a line of cookies and candies sweetened exclusively with organic honey. Although DWK is selling some of
    12·1 answer
  • A paint manufacturing company has three factories located in France, Germany, and Spain. The productivity data of the factories
    5·1 answer
  • Scenario 22-3: Economy of Centralia Centralia has no trade and no government. GDP = $25 trillion. Consumption Spending = $18 tri
    9·1 answer
  • Which of the following would be purchased with an individual's discretionary income?
    14·1 answer
  • Break-Even Sales Under Present and Proposed Conditions
    10·1 answer
  • You notice that the price of Blu-ray players falls and the quantity of Blu-ray players sold increases. You suspect that _____ Bl
    10·1 answer
  • 1. Bob bought a $135,000 term life insurance policy. He is 35 years old and does not smoke. Find
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!