Leases demolition equipment to credit worthy adults

Assignment Help Financial Accounting

Reference no: EM131262268

A Company leases demolition equipment to credit worthy adults who wish to destroy the homes a competitor. A Company has agreed to lease a crane with a wrecking ball to Barbara. Ms. Bush has formed a limited liability corporation, BB, Inc., to lease the crane. Ms. Bush has agreed to pay $11,509.34 per month for a lease term of 30 months beginning March 1, 2016, with the first payment due on this date. A Company's interest rate on the lease is 12%, which is known by BB, and BB's incremental borrowing rate is 14%. Assuming the lease meets the criteria to be recorded as a capital lease by both the lessee and lessor, prepare the first two month's entries on the books of A Company and BB, Inc. The present value annuity due factor for 30 periods at a 1.00% interest rate is 26.06579. Please show all steps on how you arrived at your, show all journal entries, not accounts, and make sure all work is clearly legible.

Reference no: EM131262268

Questions Cloud

Assuming the distribution is non-taxable : Badger Corporation declared a stock dividend to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for each 10 shares of stock they already own. What amount of taxable dividend income, if any, doe..

What is the income tax imposed on the corporate income : Bulldog Corporation reported taxable income of $660,000 this year, before any deduction for any payment to its sole shareholder and employee, Georgia Brown. Bulldog chose to pay a bonus of $172,000 to Georgia at year-end. Bulldog Corporation is subje..

Companies logos that are immediately identifiable : There are companies logos that are immediately identifiable. Starbucks for example opens locations around the world with little to no advertising or promotion and there are lines around the block at every opening. Why do some companies need to promot..

What is current portion of long-term liabilities : What is current portion of long-term liabilities. What are some examples? How is the current portion determined and why?

Leases demolition equipment to credit worthy adults : A Company leases demolition equipment to credit worthy adults who wish to destroy the homes a competitor. A Company has agreed to lease a crane with a wrecking ball to Barbara. Ms. Bush has formed a limited liability corporation, BB, Inc., to lease t..

The straight-line method of depreciation would be used : On January 1, 2016, Alpha Company purchased equipment for $16,000 with an estimated 10-year life and no salvage value. It was determined that the straight-line method of depreciation would be used. Alpha has a December 31 fiscal year end. During 2020..

Using the double-declining balance method : Bravo Company purchased a truck on October 1, 2016. Bravo paid $10,000 for the truck in addition to $500 registration & sales taxes. The truck is expected to have a $2,000 residual value and a 5-year life. Bravo has a December 31 fiscal year end. Usi..

Be happy taxable income and regular income tax : All deductions, phase-out amounts, taxes, etc. are to be derived from the 2015 tax laws and rates. Be Hapy Corporation, a fiscal year, accrual basis C corporation, has income and expense for the year ended June 30, 2016 as follows: Compute, in schedu..

Advantages and disadvantages of not forming partnership : Mario Rosario (“Mario”), a permanent resident in Hong Kong, owns a small wine cellar in Central selling top-end wines and Scotch under the name “Mario & Company”. Advise Joseph on what can be done to invest in “Mario & Company” without becoming a par..

User Account

All Pages