Answer:
The answer is: If Orion wants to have $3,000 in two years, he must invest $2,572.02 today
Explanation:
To determine how much money Orion has to invest today in order to have $3,000 in two years, considering he will get an 8% compound interest rate, we can use this formula:
P = FV / (1 + r)²
Where:
P = $3,000 / (1 + 8%)²
P = $3,000 / 1.1664
P = $2,572.02
Answer:
$35,000
Explanation:
Since this is an operating lease (short lease term, no transfer of ownership, and low present value of lease payments), the lessor has to record a depreciation expense, but the lessee only considers lease payments as operating costs (no depreciation expense or lease liability should be recognized).
Depreciation expense per year under the straight line method = asset cost / useful life = $280,000 / 8 years = $35,000
Answer:
Debit to Unearned Rent
Credit to Rent Earned for $2,925
Explanation:
Given:
Amount of total rent = $7,800
Computation:
Amount unearned = Amount of total rent (3months / 8 months)
Amount unearned = 7,800 [3/8]
Amount unearned = $2,925
Journal entry:
Unearned rent A/c Dr $2,925
Rent A/c Cr $2,925
[Debit to Unearned Rent
Credit to Rent Earned for $2,925]
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