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levacccp [35]
3 years ago
8

Exercise 15-14 Presented below are two independent situations. 1. Flinthills Car Rental leased a car to Jayhawk Company for one

year. Terms of the operating lease agreement call for monthly payments of $300. 2. On January 1, 2017, Throm Inc. entered into an agreement to lease 20 computers from Drummond Electronics. The terms of the lease agreement require three annual rental payments of $26,000 (including 11% interest) beginning December 31, 2017. The present value of the three rental payments is $63,536. Throm considers this a capital lease. Prepare the appropriate journal entry to be made by Jayhawk Company for the first lease payment.
Business
1 answer:
IrinaVladis [17]3 years ago
8 0

Answer:

Part 1

Dr Lease rentals $300........ Expense

Cr     Cash Account $300

Part 2

Dr Leased Equipment $63,536

Cr Finance Lease Liability  $63,536

Explanation:

Part 1. Under the operating leases the lessee pays the monthly rentals which must be accounted for as an expense and the double entry is as under:

Dr Lease rentals $300........ Expense

Cr     Cash Account $300

Part 2. Under the finance lease agreement, the lessee pays the value of the asset and the interest as well. So after the date of agreement when the asset is handed over the journal entry would be recording of the equipment received, which would written at its fair value or present value of the payments made. The journal entry would be:

Dr Leased Equipment $63,536

Cr Finance Lease Liability  $63,536

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Answer and Explanation:

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where,

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= $800,000 ÷ 1.13 + $1,250,000  ÷ 1.13^2

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So, the current share price is

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No of shares of stock must be sold is

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Current price per share = Value of Firm  ÷ Number of stock outstanding

where,

Value of Firm is

= $910,000 ÷ 1.13 +  $1,250,000 ÷ 1.13^2

= $1,784,243.09

And, the number of outstanding shares is 35,000 shares and $2,282.16

So, the current share price is

= $1,784,243.09  ÷ 35,000 shares  + $2,282.16

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5 0
3 years ago
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of in
ra1l [238]

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Bond Price​= $846.3

Explanation:

Giving the following information:

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<u></u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

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6 0
2 years ago
E14.3 (LO 1) (Entries for Bond Transactions) Presented below are two independent situations. 1. On January 1, 2020, Simon Compan
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Dr Interest expense 4,500

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Dr Cash 104,000

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8 0
3 years ago
Draw a demand for dollars curve. Label it D. Draw a supply of dollars curve. Label it S. Draw a point at the equilibrium quantit
brilliants [131]

Answer:

The forces of demand and supply in the market will pull the foreign exchange market into equilibrium.

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When there is a surplus of dollar in the foreign exchange market the forces of demand and supply  will pull the foreign exchange market into equilibrium.<em> i.e. The exchange rate will be reduced to bring the exchange market to equilibrium. </em> without change in demand or supply.

attached below is the required graph.

3 0
2 years ago
How much cash flow an $400 000 investment can produce?
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Can totally vary. Normally, it can create 1,000 dollars up to 2,000 dollars if it's a good investment.  
3 0
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