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Anastasy [175]
3 years ago
13

On January 1, 2012, Porter Corporation signed a five-year noncancelable lease for certain machinery. The terms of the lease call

ed for:
1. price to make annual payments of $60,000 at the end of each year (starting on December 31, 2012) for five years. Porter must return the equipment to the lessor end of this period.
2. the machinery has an estimated useful life of 6 years and no expected salvage value.
3. Porter uses the straight-line method of depreciation for all of its fixed assets.
4. Porter's incremental borrowing rate is 8%. 5. the fair value of the asset at January 1, 2012, is $275,000.

At January 1, 2012, Porter should record an asset and liability with respect to the equipment lease equal to ________.
Business
1 answer:
SashulF [63]3 years ago
7 0

Answer:

$275,000

Explanation:

The <em>lease liability</em> is recorded at the Present Value amount of the lease payments based on the incremental borrowing rate.

The <em>lease asset</em> is recorded at the same amount of lease liability including other costs of placing the assets in location and condition intended for use by management.

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Answer: The correct answer is "B. Letter of credit".

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Is a payment mechanism used in international trade.

6 0
3 years ago
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What is the National Labor Relations Board responsible for?
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Elka can remember the phone number she just looked up only by repeating it over and over. When she stops saying it out loud, she
Harrizon [31]

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maintenance; short-term

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3 0
3 years ago
If interest rates on the euro are consistently below U.S. dollar interest rates, then for the International Fisher Equation (IFE
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The euro will appreciate against the dollar.

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So as per the given option, the above should be the answer and the same should be relevant

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4 0
2 years ago
A local government operates on a calendar-year basis. Prepare journal entries to record the following transactions and events fo
astra-53 [7]

Answer:Please find answers in explanation column

Explanation:

1. Journal to record Short term borrowing

Date                 Account title                             Debit                  Credit

Feb. 1, 2018     Cash                                         $400,000

Tax anticipation notes payable                                                   $400,000

2.Journal to record  accrued interest payable on TAN)

Date                 Account title                             Debit                  Credit

Dec. 31, 2018   Expenditures – interest            $3,666.67  

Accrued interest payable                                                            $3,666.67  

Calculation :Accrued interest=  Principal x rate x period (time)

$400,000 x 1% x 11/12= $3,666.67  

3. Journal to record investment in  CD

Date                 Account title                             Debit                  Credit

April 1, 2018       Investments                            $100,000

                            Cash                                                                    $100,000

4.Journal To record redemption of CD with interest

Date                 Account title                             Debit                  Credit

Sept. 30, 2018          Cash                       $100,400

                               Investments                                                    $100,000

Cash Revenues – interest income                                                      $400

Calculation

Accrued Interest

Principal x rate x period (time= )100, 000 x 0.8 %x 6/12)= $400

Cash = Investment + interest= $100,000 + $400 = $100,400

4 0
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