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Sonja [21]
3 years ago
9

On January 1, 2019, Mitchell Company leases equipment from Donelson Corp. for the equipment's entire useful life of six years. D

anelson acquired the asset for $239,826 and normally utilizes an 5% interest rate for these types of transactions. The annual lease payment is $45,000, and the first payment is made at the inception of the lease. Donelson should record which of the following in connection with the second payment?
1. Debit to interest expense of 11,991.
2. Credit to interest revenue of 11,991.
3. Debit to lease payable of $35,259.
4. Credit to lease receivable of $35,259.
Business
1 answer:
Margarita [4]3 years ago
7 0

Answer:

d. Credit to lease receivable of $35,259

Explanation:

Date    General Journal                Debit     Credit

           Cash                                 $45,000  

                 Lease receivable                      $35,259

                 ($45000 - $9741)

                Interest expense                       $9,741

                [($239826-$45000)*5%]

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Brown Company provided services to a customer and immediately collected $1,900 cash. Show how to record the transaction to the T
hjlf

Answer:

credited; right; debited; left

Explanation:

The journal entry to record this transaction is shown below:

Cash A/c Dr $1,900

     To Service revenue A/c $1,900

(Being the cash is collected)

It to be displayed in T accounts

For cash account

                                                               Cash

Debit side

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For service revenue account

                                                    Service revenue

                                                                                      Credit side

                                                                                     Cash    $1,900

So, the cash account would be debited and would be displayed on the left hand side while the service revenue would be credited and  would be displayed on the right hand side

8 0
3 years ago
Which financial leverage ratio is used with two other ratios to mathematically produce the return on equity ratio?
ipn [44]

Answer: c. Total Assets/ Equity

Explanation:

To measure the Return on Equity with 3 ratios, the <em>DuPont Analysis</em> can be used. This is a technique of deconstructing the Return on Equity ratio into various constituent ratios so that their effect on Return on Equity is better know.

The basic DuPont Analysis is;

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Total Assets/ Equity or the Assets to Shareholder Equity ratio is the answer.

5 0
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Answer:

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