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Law Incorporation [45]
3 years ago
7

On January 1, 2018, Johnstone leased an office building. Terms of the lease require Johnstone to make 15 annual lease payments o

f $134,000 beginning on January 1, 2018. A 10% interest rate is implicit in the lease agreement. At what amount should Johnstone record the lease liability on January 1, 2018, before any lease payments are made?
Business
1 answer:
Assoli18 [71]3 years ago
3 0

Answer:

LEASE LIABILITY: 1,121,136

Explanation:

the lease liaibility will be the present value of an annuity-due (payment at beginning of the period)

C \times \frac{1-(1+r)^{-time} }{rate}(1+r) = PV\\

C 134,000

time 15

rate 0.1

134000 \times \frac{1-(1+0.1)^{-15} }{0.1} (1+0.1)= PV\\

PV $1,121,136

The lease laibility will be for 1,121,136

interst expense will be recognize over time against the lease liability and the payment decrease the liability. at the end of the agreement the lease liaiblity will be zero as there are no pending payment.

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Answer:

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sasho [114]
Hey there!

The correct answer to your question is "velocity."

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3 years ago
Read 2 more answers
What term can be used to describe the situation where your fixed and variable expenses are higher than your net income.(1 point)
Pepsi [2]

The term that describes the situation where <em>fixed and variable </em><em>expenses</em><em> are higher than</em> net income is <em>D. dissaving.</em>

Dissaving happens when an individual is spending from either previous savings or borrowing to fund current expenses.

Dissaving is commoner with retirees than those currently employed. But it can also happen to currently-employed persons, whose expenses are more than their incomes. They should find strategies to stop the negative saving. Otherwise, their debts may be overbearing in future.

Thus, dissaving means negative saving or <em>spending more than income.</em>

Learn more: brainly.com/question/13954775

8 0
2 years ago
If the MPC is 0.80 and disposable income increases from 32,000 billion to $37,000 billion, then consumption will increase by: A.
horsena [70]

If the MPC is 0.80 and disposable income increases from 32,000 billion to $37,000 billion, then consumption will increase by: B. $29,600 billion.

<h3>Increase in consumption</h3>

Using this formula=Increase in disposable income×MPC

Where:

Increase in disposable income=$37,000

MPC=0.80

Let plug in the formula

Increase in disposable income=$37,000 billion×0.80

Increase in disposable income=$37,000 billion×0.80

Increase in disposable income=$29,600 billion

Therefore consumption will increase by:  B. $29,600 billion.

Learn more about increase in consumption here:brainly.com/question/6955443

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2 years ago
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bogdanovich [222]

Answer:

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