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Shalnov [3]
3 years ago
6

Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Teal Mountain Company. The following informat

ion relates to this agreement.
1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years.
2. The fair value of the asset at January 1, 2020, is $74,000.
3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $3,000, none of which is guaranteed.
4. The agreement requires equal annual rental payments of $24,716 to the lessor, beginning on January 1, 2020.
5. The lessee’s incremental borrowing rate is 5%. The lessor’s implicit rate is 4% and is unknown to the lessee.
6. Teal Mountain uses the straight-line depreciation method for all equipment.

Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 0 decimal places, e.g. 5,265.)

Prepare all of the journal entries for the lessee for 2020 and 2021 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.)

Business
1 answer:
SpyIntel [72]3 years ago
3 0

Answer:

The journal entries are attached

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Easy to read quickly

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3 years ago
IT'S URGENT AND IMPORTANT!!!!
Vera_Pavlovna [14]

the producer in this case sujid is gaining a little more money because then when the profit is increased he will get a little less money because then the people will buy it but the money will be less for the producer(s)

4 0
3 years ago
Game theory assumes that: Group of answer choices firms anticipate rival firms' decisions when they make their own decisions. fi
muminat

Answer:

firms anticipate rival firms' decisions when they make their own decisions.

Explanation:

Game theory assumes that firms anticipate rival firms' decisions when they make their own decisions. It is very important and necessary for understanding firms operating in an oligopolistic market.

An oligopoly can be defined as a market structure comprising of a small number of firms (sellers) offering identical or similar products, wherein none can limit the significant influence of others.

Hence, it is a market structure that is distinguished by several characteristics, one of which is either similar or identical products and dominance by few firms.

This ultimately implies that, under the game theory, when firms makes a decision about their business, it is expected that they consider how the other firms would react to such decisions.

3 0
2 years ago
Galvatron Metals has a bond outstanding with a coupon rate of 6.1 percent and semiannual payments. The bond currently sells for
Eva8 [605]

Answer:

After tax cost of debt is 4.16%

Explanation:

The yield on the debt which is pre-tax cost of debt can be computed using the rate formula in excel, which is given as follows:

=rate(nper,pmt,-pv,fv)

where nper is the number of coupon payments,this is calculated as 19*2 since it has a semi-annual coupon interest

pmt is the periodic coupon payment  6.1%/2*$2000=$61

pv is the current price of the bond which is $1933

fv is the face value repayable on redemption $2000

=rate(38,61,-1933,2000)

=3.20%

This is semi-annual yield , annual yield is 3.20%*2=6.40%

After tax cost of debt=6.40%*(1-t)

where t is the tax rate at 35%=0.35

after tax cost of debt=6.40%*(1-0.35)

                                  =4.16%

5 0
3 years ago
Spacefood Products will pay a dividend of $ 2.25 $2.25 per share this year. It is expected that this dividend will grow by 3 3​%
gavmur [86]

Answer:

$32.14 per share

Explanation:

The computation of the current value of the single share is shown below:

= Current year dividend ÷ (Required rate of return - growth rate)

where,

Current year dividend is $2.25 per share

Required rate of return is 10%

And, the growth rate is 3%

So by placing these items, the current value is

= $2.25 ÷ (10% - 3%)

= $32.14 per share

7 0
2 years ago
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