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lana [24]
3 years ago
11

Wilson foods corporation leased a commercial food processor on september 30, 2018. the five-year finance lease agreement calls f

or wilson to make quarterly lease payments of $195,774, payable each september 30, december 31, march 31, june 30, with the first payment at september 30, 2018. wilson's incremental borrowing rate is 12%. wilson records amortization on a straight-line basis at the end of each fiscal year. wilson recorded the lease as follows:
Business
1 answer:
ella [17]3 years ago
8 0

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

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2 years ago
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A local county is considering purchasing some dump trucks for the trash pickups. Each truck will cost $55,000 and have an operat
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Answer:

35,972

Explanation:

The equivalent annual cost can be calculated dividing NPV by the annuity factor

In order to find NPV first

                                   Year1    Year2   Year3   Year4  Year5         Total

Operating and

Maintenance              18000 21000  24000  27000 30000          -

Discount factor(10%)  0.909   0.826   0.751   0.683   0.620           -

Discounted CFs          16362   17346  18024    18411   18600      88,713

Salvage                                                                          12000  

Discount factor(10%)                                                     0.620

Discounted salvage                                                      7440        (7440)

Inital Cost                   (55,000)                                                      (55,000)

NPV                                                                                                136,333

Calculation for EAC

NPV = 136,333

Annuity factor for 5 years = 3.790

Equivalent annual cost = NPV /Annuity factor

Equivalent annual cost = 136,333/3.790

Equivalent annual cost = 35,972

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3 years ago
Suppose the exchange rate is 10 pesos per dollar and you use $1000 to purchase a one-year mexican bond that pays 10% interest. N
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The amount of money I would have in US dollars would be $1,000

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The first step is to convert dollars to pesos:

$1000 x 10 = 10,000 pesos

The second step is to determine the value of the investment in a year's time: (1.10) x 10,000 = 11,000 pesos

Now, convert pesos to dollars : 11,000 / 11 = $1,000

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6 0
2 years ago
The unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in
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We can actually deduce here that the unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics as: D. Secondary effects.

<h3>What is unintended consequence?</h3>

Unintended consequence, as seen in social sciences are known to be the result or outcome that is gotten from a purposeful action which were not seen coming.

The options that complete the question are:

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d. secondary effects

We can actually deduce here that such unintended consequences of an economic change that are not immediately identifiable but are felt only with time are known in economics are known to be secondary effects.

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Answer:

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