1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
nordsb [41]
2 years ago
14

On January 1, 2021, Bombay Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for B

ombay to make annual payments of $180,000 at the beginning of each year for five years with title passing to Bombay at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Bombay uses the straight-line method of depreciation for all of its fixed assets. Bombay accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $750,578 at an effective interest rate of 10%.
Required:
In 2022, Cullumber should record interest expense of:______
Business
1 answer:
tresset_1 [31]2 years ago
4 0

Answer:

In 2022, Cullumber should record interest expense of $57,057.80.

Explanation:

The interest expense can be calculated using the following formula:

Interest expense = (Present value of lease payments - Annual payments at the beginning of each year) * Effective interest rate .................... (1)

Where:

Annual payments at the beginning of each year = $180,000

Present value of lease payments = $750,578

Effective interest rate = 10%

Substituting the values into equation (1), we have:

Interest expense = ($750,578 - $180,000) * 10% = $57,057.80

Therefore, Cullumber should record interest expense of $57,057.80 in 2022.

You might be interested in
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic pric
kotykmax [81]

Answer:

Export

true

Explanation:

Because the price of meekers in meekertown is lower than the world price for meekers, meekers from meekertown are cheaper. so if free trade is allowed, other countries would want to purchase meekers from meekertown because it is cheaper.

So, meekertown would export meekers if free trade is allowed.

When a country is too small affect the world price, allowing for free trade will always increase total surplus in that country, regardless of whether it imports or exports as a result of international trade.

this is so because if the country is efficient in production of a good (producing at a lower price when compared to the world price), export of the good would increase thus increasing producer surplus. if on the other hand, the country is inefficient in producing a good and the country allows for free trade, the country can import the good. this would increase consumer surplus.

4 0
3 years ago
What are persuasive messages
kozerog [31]

Answer:

A message in which you are trying to get the reader to agree with your opinion. This way the walk away with a new perspective over such topic.

3 0
3 years ago
Read 2 more answers
What is a lien and when can it be used/
Talja [164]

A lien is a claim against an asset, often to get a loan. All debts related have to be paid before it is removed.

3 0
3 years ago
Read 2 more answers
Profit Inc., a manufacturing firm, has purchased raw materials worth $10,000 on credit from its vendors. The business plans to s
andrezito [222]

Profit Inc., a manufacturing firm, has purchased raw materials worth $10,000 on credit from its vendors. The business plans to settle the vendor’s full payment after two months. Under "current liabilities"section of balance sheet this account will be recorded as "account payable".

Answer: Option (B) is correct

<u>Explanation:</u>

Raw material purchased on credit from a vendor is a liability and it is shown under current liabilities in "accounts payable". Since raw material purchased on credit and payment is to be made after two months.

Payment due gives rise to liability. Now current liability is a company's short term obligations that are to be paid back within a year. Here the firm will have to make payment within two months to the vendor.

8 0
2 years ago
Read 2 more answers
Products that are difficult to move out of a plant once they are manufactured, such as ocean-going vessels and room-sized murals
Lesechka [4]

Answer:

fixed-position

Explanation:

3 0
2 years ago
Other questions:
  • Which element of the promotional mix has the inherent weakness of high absolute costs and an inability to obtain direct feedback
    8·1 answer
  • The dry cleaning business can be characterized as a perfectly competitive industry because the costs of entry are low and there
    9·1 answer
  • You have a lot of free time after school. You applied for a temporary job to save money for college. Two companies called to off
    10·2 answers
  • Write the features of correspondence?​
    12·1 answer
  • A person appointed by the president to represent the united states in a foreign country is _____.
    14·2 answers
  • If all courses were regular (not honors or AP) 1 credit classes, calculate the student's GPA based on the following grades:
    11·1 answer
  • At the beginning of October, Bowser Co.’s inventory consists of 58 units with a cost per unit of $42. The following transactio
    5·1 answer
  • Ruben is a travel agent. He intends to sell his customers a special round-trip airline ticket package. He is able to purchase th
    8·1 answer
  • why shall professional groups shall not be allowed to assign their own professional codes of conduct and police themselves from
    11·1 answer
  • When individuals use all available information about an economic variable to make a decision, expectations are?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!