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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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On January 1, 2005, Marcy Company purchased 1,000 shares of its own common stock for $22,000. On February 1, 2005, they sold 600
Nastasia [14]

Answer:  E) debit Contributed Capital, Treasury Stock, $1,800

Explanation:

Treasury stock was bought at price of;

= 22,000/1,000

= $22

Sold 600 for $25 so they made a profit of;

= (25 - 22) * 600

= $1,800

This gain was sent to Contributed Capital, Treasury Stock.

Now that stock is to be sold on March 1, it is sold at $15. Loss from initial purchase is;

= ( 22 - 15) * 400

= $2,800

Debit Contributed Capital, Treasury Stock of the maximum amount it can be debited of to reflect this loss which would be $1,800 which was gained in the February purchase. The rest of the loss will go to Retained earnings.

3 0
3 years ago
The following information has been taken from the ledger accounts of Bridgeport Corporation.
stealth61 [152]

Answer:current balance of retained earnings=$206,000

Explanation:

Net Retained Earnings =  Total Income since Incorporation−

Total Cash Dividend Paid−  Value of Stock Dividend distributed

Where

cash dividends distributed among the stakeholders= $55,000

 value of stock dividends distributed  = $31,000

Total Dividend Distributed = $86,000

Net Retained Earnings = $292,000 -($86,000)=$206,000

5 0
3 years ago
"Many forms of online communication, such as e-mails, tweets, and the content of Web pages, requires short-form, concise writing
STatiana [176]

Explanation:

The advertising strategy before the internet was carried out on platforms such as radio, television and newspapers, which were the media that people most had access to. Currently, the internet is the main platform for advertising and interaction between companies and consumers. This is due to the ease and speed with which the flow of the internet happens, the messages are seen almost instantly and available in the palm of the hand, available from a smarthphone.

However, despite the ease of implementing marketing through social media, it is necessary for companies to adopt an advertising engagement strategy, the narrative must be summarized and contain essential traits that convey who the company is and what it wants to pass on to consumers , generating value and direct communication, making the message different and striking in a medium where there is different information every second.

4 0
3 years ago
Gianna put $1,000 in a savings account for 18 months. The interest on the account is 3.5%.
Nadya [2.5K]

Answer:

You will earn $52.96 in interest

You have $1,052.96 in total.

6 0
3 years ago
The transactions of Spade Company appear below.
torisob [31]

Answer:

Please see the required journals below.

Explanation:

a. Owner's investment in business

Debit Cash $18,750

Credit Common Stock $18,750

b. Purchase of office supplies

Debit Office Supplies $544

Credit Cash $544

c. Purchase of office equipment on credit

Debit Office Equipment $10,369

Credit Accounts Payable $10,369

d. Receipt of fees for services provided to a customer

Debit Cash $2,212

Credit Fees Earned $2,212

e. Payment of office equipment purchased on credit

Debit Accounts Payable $10,369

Credit Cash $10,369

f. Fees for services provided to a customer

Debit Accounts Receivable $3,975

Credit Fees Earned $3,975

g. Payment for monthly rent

Debit Rent Expense $515

Credit Cash $515

h. Collection of partial accounts receivable in (f) above

Debit Cash $1,670

Credit Accounts Receivable $1,670

i. Withdrawal of cash for personal use

Debit Drawings account $1,100

Credit Cash $1,100

5 0
3 years ago
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