GIVE ME THE IDEAS FROM THIS CASE AND WHAT WE HAVE LOOKED AT IN THE PICTURE!!

On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn

xeze [42]

Answer:

1. Jan. 1, 2021

Dr Right-of-use Asset $417,665

Cr Lease Liability $417,665

Jan. 1, 2021

Dr Lease Liability 61,000

Cr Cash 61,000

Dec. 31, 2021

Dr Lease Liability $25,870

Dr Interest Expense 35, 130

Cr Cash 61,000

Dec. 31, 2021

Dr Amortization Expense $41,230

Cr Right-of-use Asset $41,230

2. Jan. 1, 2021

Dr Lease Receivable $610,000

Cr Sales Revenue $610,000

Jan. 1, 2021

Dr Cash $61,000

Cr Lease Receivable $61,000

Dec. 31, 2021

Dr Cash $61,000

Cr Lease Receivable $61,000

Explanation:

1. Preparation of the appropriate entries for the lessee related to the lease on January 1, 2021 and December 31, 2021.

Jan. 1, 2021

Dr Right-of-use Asset $417,665

Cr Lease Liability $417,665

(To record lease)

Jan. 1, 2021

Dr Lease Liability 61,000

Cr Cash 61,000

(To record lease payment)

Dec. 31, 2021

Dr Lease Liability $25,870

($61,000-35,130)

Dr Interest Expense 35, 130

Cr Cash 61,000

(To record lease payment)

Dec. 31, 2021

Dr Amortization Expense $41,230 (412,300/10)

Cr Right-of-use Asset $41,230

(To record amortization)

2. Preparation of the appropriate entries for the lessor related to the lease on January 1, 2021 and December 31, 2021.

Jan. 1, 2021

Dr Lease Receivable $610,000

Cr Sales Revenue $610,000

($61,000*10)

(To record lease payment)

Jan. 1, 2021

Dr Cash $61,000

Cr Lease Receivable $61,000

(To record cash received)

Dec. 31, 2021

Dr Cash $61,000

Cr Lease Receivable $61,000

(To record cash received)

3 0

3 years ago

A company's strategy is unlikely to succeed unless:

Montano1993 [528]

Answer:

d.both answers 1 and 3 occur.

That is

a.the company has competencies and capabilities to efficiently sustain its competitive differentiation.

c.the company's competitive advantage grows out of the entire system of activities working together.

Explanation:

In a perfectly competitive market firms have similar products and so they must compete with each other to get market share.

Gaining a competitive advantage is key in surviving within the market.

Differentiation of its products is the first step to success. When a firm's product is differentiated from others it will gain more customer loyalty as the end user identies the product with a particular trait for example high quality.

When the companie's activities are well synchronised the company achieves efficiency which is a competitive advantage of higher output than other firms.

8 0

3 years ago

⦁ a local drama company proposes a new neighborhood theater in san francisco. before approving the permit, the city planner comp

aleksandrvk [35]

<span>This is a negative externality. Since the cost of the traffic being in the community is not being borne by the theatre company itself, it is negative. The community as a whole is having to pay for the extra $5 in costs that will be accrued as a result of selling each ticket.</span>

3 0

2 years ago

When interest is compounded continuously, the amount of money increases at a rate proportional to the amount S present at time t

liubo4ka [24]

Answer:

a) - r=5%: $S=$ 5,136.10$

- r=4%: $S=$ 4,885.61$

- r=3%: $S=$ 4,647.34$

b) - r=5%: t=14 years

- r=4%: t=17 years [/tex]

- r=3%: t=23 years [/tex]

c) The amount obtained is

- Compuonded quarterly: $5,191.83

- Compuonded continously: $5,200.71

The latter is always greater, since the more often it is capitalized, the greater the effect of compound interest and the greater the capital that ends up accumulating.

Explanation:

The rate of accumulation of money is

$dS/dt=rS$

To calculate the amount of money accumulted in a period, we have to rearrange and integrate:

$\int dS/S=\int rdt=r \int dt\\\\ln(S)=C*r*t\\\\S=C*e^{rt}$

When t=0, S=S₀ (the initial capital).

$S=S_0=Ce^{r*0}=Ce^0=C\\\\C=S_0$

Now we have the equation for the capital in function of time:

$S=S_0e^{rt}$

a) For an initial capital of $4000 and for a period of five years, the amount of capital accumulated for this interest rates is:

- r=5%: $S=4000e^{0.05*5}=4000*e^{0.25}= 5,136.10$

- r=4%: $S=4000e^{0.04*5}=4000*e^{0.20}= 4,885.61$

- r=3%: $S=4000e^{0.03*5}=4000*e^{0.15}= 4,647.34$

b) We can express this as

$S=S_0e^{rt}\\\\2S_0=S_0e^{rt}\\\\2=e^{rt}\\\\ln(2)=rt\\\\t=ln(2)/r$

- r=5%: $t=ln(2)/0.05=14$

- r=4%: $t=ln(2)/0.04=17$

- r=3%: $t=ln(2)/0.03= 23$

c) When the interest is compuonded quarterly, the anual period is divided by 4. In 5 years, there are 4*5=20 periods of capitalization. The annual rate r=0.0525 to calculate the interest is also divided by 4:

$S = 4000 (1+(1/4)(0.0525))^{5*4}=4000(1.013125)^{20}\\\\S=4000*1.297958= 5,191.83$

If compuonded continously, we have:

$S=S_0e^{rt}=4000*e^{0.0525*5}=4000*1.3= 5,200.71$

The amount obtained is

- Compuonded quarterly: $5,191.83

- Compuonded continously: $5,200.71

The latter is always greater, since the more often it is capitalized, the greater the effect of compound interest and the greater the capital that ends up accumulating.

5 0

3 years ago

Which cash flow would you rather pay, $425 today or $500 in two years if interest rates are 10 percent? Why?

DerKrebs [107]

Answer:

Explanation:

The main goal is to compare these two based on the same terms; present values. Find the present value of $500 today by discounting it using 10% interest rate over two years.

PV = FV/ (1+r)^n

where FV = Future value = $500

r = discount rate = 10% or 0.10 as a decimal

n = total duration of investment = 2

PV = $500/(1+0.10)^2

PV = $500/1.21

PV = $413.22

Since you are basing the decision on what you would rather pay, you would want a lower pay amount. The $425 is already in its present value terms and it is more expensive. Therefore, you would prefer to pay $500 in two years.

7 0

2 years ago