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Answer:
The journal entry to record the lease would be:
Debit Credit
Asset $3,000,000
Lease Payable $3,000,000
Debit Credit
Lease Payable $195,774
Cash $195,774
Explanation:
To prepare the journal entry to record the lease we would have to calculate the present value of lease payments as follows:
present value of lease payments=$195,774*15.32380=$3,000.000
Therefore, the journal entry to record the lease would be:
Debit Credit
Asset $3,000,000
Lease Payable $3,000,000
Debit Credit
Lease Payable $195,774
Cash $195,774
Answer:
False
Explanation:
Interest Bearing Account is an account which generates interest income over a specified period of time. Certificate of Deposit is an example for the interest bearing account. So, simply saying that An interest-bearing account is an account that generates interest income on the available balance in the account is wrong.
Answer:
A) Total revenue = 400 loaves of bread x $2 per loaf of bread = $800
B) Total economic costs = (5 units of labor x $40 per unit of labor) + (7 units of land x $60 per unit of land) + (2 units of capital x $60 per unit of capital) + (1 unit of entrepreneurial ability x $20 per unit) = $200 + $420 + $120 + $20 = $760
C) Economic profit or loss = total revenue - total economic costs = $800 - $760 = $40
The correct answer to this open question is the following.
Although the question is incomplete because it does not attach the model to answer it we can comment on the following.
The problem is that Jamal, trying to increase profits, decided to sell two different products that are not part of the Subway products. When the franchisor visited Jamal's location, it realized the changes and set an ultimatum to Jamal to respect the franchise agreement.
The cause of the problem is that although Jamal wanted to diversify the products to have more income, this contradicts and is against the franchise agreement he signed when he bought the Subway franchise. The contract clearly states that the owner of the franchise can only sell products authorized in the contract by Subway. That is exactly one of the characteristics of a franchise. That you visit one of them any place in the world, and you are going to find de the same products with the same quality. That is the product guarantee of a franchise like Subway.
So the effects for the company are that its reputation an image can be questioned for selling different products that are hot approved by Subway. It is a major risk the company is not going to allow. Furthermore, it is stated in the contract. So Jamal has no right to break it.
One possible solution is that Jamal respects those 30 days to make the proper corrections, follow the guidelines established in the Subway's manuals, offer a sincere apology, and commit himself to operate the franchise just as it is stated on the agreement.
