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emmainna [20.7K]
3 years ago
11

On January 1, 2018, Ogleby Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for O

gleby to make annual payments of $180,000 at the beginning of each year for five years with title passing to Ogleby at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Ogleby uses the straight-line method of depreciation for all of its fixed assets. Ogleby accordingly accounts for this lease transaction as a finance lease. The minimum lease payments were determined to have a present value of $750,578 at an effective interest rate of 10%.
With respect to this lease, for 2018 Ogleby should record

a. rent expense of $180,000.

b. interest expense of $57,058 and amortization expense of $150,116.

c. interest expense of $57,058 and amortization expense of $107,225.

d. interest expense of $90,000 and amortization expense of $181,956

Show all work including formulas
Business
1 answer:
Olin [163]3 years ago
4 0

Answer:

With respect to this lease, for 2018 Ogleby should record interest expense of $57,058 and depreciation expense of $107,225. The right answer is c

Explanation:

According to the given data we have the following:

PV of lease=$750,578

Annual payment=$180,000

Rate of interesr=10%

The interest expense would be calculated as follows:

Interest expense = ( PV of lease - Annual payment ) * Rate of interest

Interest expense = ( $750,578 - $180,000 ) * 10%

Interest expense = $57,058

Therefore, With respect to this lease, for 2018 Ogleby should record interest expense of $57,058 and depreciation expense of $107,225.

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Derk owns 250 shares of stock in Rose Corporation. The remaining 750 shares of Rose are owned as follows: 150 by Derk’s daughter
Mama L [17]

Answer:

720 shares

Explanation:

Given that,

Derk owns = 250 shares of stock in Rose Corporation

750 shares of Rose are owned as follows:

Derk’s daughter owns = 150

Derk’s aunt = 200

Shares in the partnership holding:

= 400 shares × Interest

= 400 shares × 80%

= 320 shares

Therefore,

Number of shares Derk owns in Rose Corporation:

= Own shares + Daughter's shares + Shares in the partnership holding

= 250 + 150 + 320

= 720

5 0
3 years ago
Chloe and Tamara start a vintage fashion boutique. While both invest equally in the store and are entitled to equal profits, it
WINSTONCH [101]

Answer:

Silent partner.

Explanation:

<u>Chloe is a </u><u>silent partner</u><u> in this vintage fashion boutique.</u> A silent partner or sleeping partner is that <u>who invest</u> in the business and have still<u> shares in the profits and losses </u>of the business, but who is <u>not involved in day-to-day business transactions</u> and in its management and his/her<u> personal property is not at risk</u> in case the business suffers losses as here Chloe and Tamara invested equally but Chloe is not taking part in the management of the business but still shares the profit and loss occurred but her personal property is not at risk<u> in case of firm's insolvency.</u>

3 0
2 years ago
How does a market surplus affect prices and consumer demand for a product?
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Answer

<u>Market surplus will lower the prices for goods and increase the consumer quantity demand for the products.</u>

Explanation

A market surplus is when there is excess supply. The quantity supply in this case is greater than the quantity demanded. Producers will be faced with a hard time to sell all their goods. This will make them lower their prices to make their products more appealing to consumers. Firms will also have to lower market prices in order to stay competitive. In response to the reduced prices, consumers will increase the quantity demanded thus moving the market to an equilibrium price and quantity. This is a case where excess supply has exerted a downward pressure on the prices of the products.



8 0
3 years ago
giannis corporation purchases debt investments as trading securities at a cost of $150,000 on december 1. this is its first and
trasher [3.6K]

In a condition given above where the Giannis Corporation sells a proportion of its trading securities, costing $9,000, for an amount of $10,000, the journal entry of the transaction would include a gain of $1,000. Therefore, the option C holds true.

<h3>What is the significance of gains?</h3>

The gains of a business organization can be referred to or considered as the surpluses earned by a company from the extraordinary and indirect operations, which are unrelated to its normal business activities. Any such gains are recorded under ''Other Revenues'' Accounts of the firm.

Therefore, the option C holds true and states regarding the significance of gains.

Learn more about gains here:

brainly.com/question/23542346

#SPJ4

The question seems to be incomplete. It has been added below.

Giannis corporation purchases debt investments as trading securities at a cost of $150,000 on December 1. This is its first and only purchase of such securities. On January 5, Giannis corporation decides to sell a portion of its trading securities (costing $9,000) for $10,000 cash. The journal entry to record this sale would include a:

A. Loss of $10,000

B. Gain of $10,000

C. Gain of $1,000

D. Gain of $9,000

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B because is B I now it is
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