Answer:
Equipment 255,667 debit
Lease Liability 255,667 credit
Explanation:
The company will post the equiptment int accounting as the same value of the discounted lease payment.
C 20,000
time 25
rate 0.06
PV $255,667.1232
On each year-end the company will recognize the interest expense and the payment of 20,000 dollars
By the end of the lease, there will be no lease liability as all payment were made
Answer: a). Spain
b). none
c). 2.4
Explanation: a). Absolute advantage occurs when a country produces more of a good than the other country. In this case, Spain produces 50 units of Tractors while, Bolivia produces only 30 units of Tractors. Thus, Since Spain is producing more it has an absolute advantage in Tractors.
b). Both the countries are producing equal units of Cotton. Thus, we can say that none of them has an absolute advantage in cotton production.
c. Opportunity cost is the cost of the lost alternative. When Spain produces Tractors it is sacrificing production of Cotton. So, opportunity cost on 1 unit of Tractor will be,
Thus, 2.4 units of cotton which is given up is the opportunity cost of Spain for producing 1 unit of Tractor.