User Account

All Pages

Journal entry at the inception of the lease

Assignment Help Accounting Basics
Reference no: EM13880881

1.At the beginning of 2013, VHF Industries acquired a machine with a fair value of $6,074,700 by signing a fouryear lease. The lease is payable in four annual payments of $2 million at the end of each year.Required:

1. What is the effective rate of interest implicit in the agreement?
2. Prepare the lessee's journal entry at the inception of the lease.
3. Prepare the journal entry to record the first lease payment at December 31, 2013.
4. Prepare the journal entry to record the second lease payment at December 31, 2014.
5. Suppose the fair value of the machine and the lessor's implicit rate were unknown at the time of the lease, but that the lessee's incremental borrowing rate of interest for notes of similar risk was 11%. Prepare the lessee's entry at the inception of the lease.

Reference no: EM13880881

Questions Cloud

Dividends are expected to grow : The current price of XYZ stock is $80.00. Dividends are expected to grow at 5% indefinitely and the most recent dividend was $2.75. What is the required rate of return on XYZ stock?
Who are the advocates of this technology : For this assignment you will be writing a critical analysis on the topic of the privacy concerns surrounding "Facial Recognition Technology". Who are the advocates of this technology and what is their argument regarding potential privacy violations
Adopted policy of increasing the annual dividend : The Garden Shoppe has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 1.65 percent annually. The firm just paid an annual dividend of $1.84. What will the dividend be eight years from now?
Determine the firm profit-maximizing employment of labor : In the short run, the firm has an installed capacity of K = 50 machine hours per day, and this capacity cannot be varied. Create a spreadsheet to model this production setting. Determine the firm's profit-maximizing employment of labor.
Journal entry at the inception of the lease : 1.At the beginning of 2013, VHF Industries acquired a machine with a fair value of $6,074,700 by signing a fouryear lease. The lease is payable in four annual payments of $2 million at the end of each year.Required:
What is the capitalized equivalent cost : A manufacturing company is considering a new investment in a machine that will cost $117,000 and has an annual cost of $7,900. There is also an additional overhauling cost of $24,000 for the equipment once every four years. Assuming that this equipme..
Bond was originally issued three years : A premium bond that pays $60 in interest annually matures in seven years. The bond was originally issued three years ago at par. Which one of the following statements is accurate in respect to this bond today?
How do computer systems minimize memory fetches : List and define the three basic interfaces enabled by the operating system. How do computer systems minimize memory fetches? Describe the difference between assemblers, compilers and interpreters. What is a transaction manager
The market capitalization rate : The market capitalization rate for Admiral Motors Company is 10%. Its expected ROE is 15% and its expected EPS is $7. If the firm’s plowback ratio is 50%. Calculate the growth rate. What will be its P/E ratio?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Preparation and subsequent use of budget

Submit your budget to the store manager with no more than a 700-word write-up for the budget. The write-up must include risks associated with sales forecasts and an analysis of ethical considerations in the preparation and subsequent use of the bu..

  The unit fixed manufacturing cost and fixed marketing and

the following information is available for each unit of the finished product produced and sold sales price 55sr

  Examine the reasons service companies

Examine the reasons service companies are more sensitive to labor and price variances, as compared to material price variances, in the industrial sector and why managing these variances is essential to sustaining profitability.

  Compute the balance in the prepaid insurance

Compute the balance in the Prepaid Insurance account on January 1, 20X2

  Determine the cash receipts during february

uring February, cash payments totaled $93,400, and the February 28 balance was $15,200. Determine the cash receipts during February.

  What was the instrumentation of the orchestra?

What was the instrumentation of the orchestra? Draw or describe the seating arrangement of the orchestra.

  Briefly describe the reporting units

1. Briefly describe the reporting units that compose the consolidated entity of that non-profit. How are they operationally interrelated?

  Using the percentage-of-receivables method for recording

using the percentage-of-receivables method for recording bad debt expense estimated uncollectible accounts are 30000.

  Is the related lease finance or operating lease

If he sells the pubs abd then leases them back would you expect Lion Nathan to change how it accounts for the depreciation of he building?

  Interest on the statement of cash flows

On April 30, 2010, B. Row, Inc. issued $50,000, 15-year, 7% bonds at 100. The bonds pay interest semiannually on April 30 and October 31. Cash paid for interest on the Statement of Cash Flows for the year ended December 31, 2010 equals:

  The aicpa code are relevant to your decision

What provisions of the AICPA Code are relevant to your decision

  Net income as a percentage of sales

Net income after tax - net income as a percentage of sales - Income tax percentage

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd