Stanley Inc. must purchase $6,000,000 worth of service equipment and is weighing the merits of leasing the equipment or purchasi
ng. The company has a zero tax rate due to tax loss carry-forwards, and is considering a 5-year, bank loan to finance the equipment. The loan has an interest rate of 10% and would be amortized over 5 years, with 5 end-of-year payments. Stanley can also lease the equipment for 5 end-of-year payments of $1,790,000 each. How much larger or smaller is the bank loan payment than the lease payment? (Hint: remember back to our bond pricing concepts and calculate the payment of the bond vs. the lease payment; loan payment - lease payment )
16. The right-hand side of the balance sheet should include entries for B. both the liabilities and the owner's equity. This side is the credit side. The left-hand side is the debit side. It is composed of the assets only.
17. The descriptive entry under the owner’s equity should appear as C. Tom Cotton, Capital.
18. A single ruled line should be drawn on the column line above the amount for total assets, total liabilities, and owner’s equity EXCEPT for C. Total Liabilities and Owner’s Equity.
19. A double-ruled line should be drawn under the amount for B. both total assets and total liabilities and owner’s equity.
<span> </span>
Answer:B. She is entitled to recover the damages if she can show that Roland agreed to pay such damages in his contract with her.
Explanation:
The non payment of the N500 installment by Roland constitute a breach of the sales contract, However an evidence of a commitment to be liable for additional cost that will be incurred will make it possible for Selina to recover the damages.