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lawyer [7]
3 years ago
12

Knottworth Gedding Consulting leased machinery from Red Inc. on July 1, 2021. The lease was recorded as a finance lease. The pre

sent value of the lease payments discounted at 10% was $40.5 million. Ten annual lease payments of $6 million are due each July 1 beginning July 1, 2021. What amount of interest expense from the lease should Knottworth Gedding report in its December 31, 2021, income statement?
Business
1 answer:
Kobotan [32]3 years ago
6 0

Answer:

The answer is: Knottworth Gedding should report $1,725,000 as interest expense in its 12/31/2021 income statement

Explanation:

The formula for calculating the amount of interest expense is:

interest expense = discount rate x (present value - yearly payment) x time

  • Discount rate = 10%
  • Present value = $40,500,000
  • Yearly  payment = $6,000,000
  • Time = 6 months / 12 months = 0.5

interest expense = 10% x ($40,500,000 - $6,000,000) x 0.5 = $1,725,000

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Answer:

Explanation:

A) using 2-year moving average :

Year 6 : (3800 + 3700) = 7500 / 2 = 3750

2) Mean absolute deviation based on the forecast above :

(3000 + 4000) = 7000/2 = 3500

(4000 + 3400) = 7400/2 = 3700

(3400 + 3800) = 7200/2 = 3600

3000

4000

3400 __3500__100

3800__3700__100

3700__3600__100

Mean absolute deviation = (100 + 100 + 100) /3 = 300/3 = 100

C) weight of 0.4 and 0.6

(0.4*3000 + 0.6*4000) = 3600

(0.4*4000 + 0.6*3400) = 3640

(0.4*3400 + 0.6*3800) = 3640

3000

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(200 + 160 + 60) = 420 / 3 = 140

5 0
4 years ago
Goals serve four very important purposes. Each purpose is related closely to one of the four functions of management. According
ASHA 777 [7]

Answer:

E

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Controlling is not closely related to the four functions of management. Planning, organizing, leading, and motivating are all functions of management. Being controlling is not an aspect of being a successful manager.

6 0
3 years ago
The entry to record the amortization of a premium on bonds payable on an interest payment date would Group of answer choices a d
Afina-wow [57]

Answer:

a debit to interest expense and premium on bonds payable and a credit to cash

Explanation:

Based on the information given The Appropriate journal entry to record the AMORTIZATION OF A PREMIUM ON BONDS PAYABLE ON AN INTEREST PAYMENT DATE will include: a DEBIT TO INTEREST EXPENSE and PREMIUM ON BONDS PAYABLE and a CREDIT TO CASH

Debit Interest expense

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(To record the amortization of premium on bonds payable on an interest payment date)

3 0
3 years ago
Why is it that everyone cannot have everything they could possibly want?
Vaselesa [24]

because that would make you spoiled, and no one will like you. And some things aren't buyable

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4 years ago
An ad for Maybelline age-minimizing makeup in Ladies' Home Journal magazine featured actress Melina Kanakaredes and offered read
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Answer:

The correct answer is C

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A brand named Maybelline released an ad for the product of age minimizing makeup and offering the readers the $1 off coupon, so in terms of the communication, the source is the term which is described as the person or the reader who use the service or the product.

Therefore, the source of the ad is the readers who redeem the coupon featuring off $1 on the product.

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