User Account

All Pages

Prepare the lessee''s entry at the inception of the lease

Assignment Help Accounting Basics
Reference no: EM13881124

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: EM13881124

Questions Cloud

What is the annual interest amount for the bond : James McCulloch purchased a 20-year U.S. Treasury bond four years ago for $8,500. The bond paid 3.500 percent annual interest. Four years later he sold the bond for $8,580. What is the annual interest amount for the bond? What is the total interest M..
Key difference between the strategy adopted by analyst : Suppose Japanese yen money market annual rate is .60% and U.S. money market has an annual rate of 4.50%. The predictions on the spot rate in 6 months made by financial analysts X and Y are ¥116/$ and ¥114/$ respectively. If the spot rate today is ¥11..
Typically within the control of the organization : Use both research and your personal experience to develop a SWOT analysis of your college or university (your school's website is almost certainly a rich source of information). Remember that strengths and weakness are internal, and typically within ..
The overall business strategy : Describe how you would handle the decision making process in the following scenario: You and a close family member have decided to open your own retail clothing store. You have equal investment risk, but different skill sets that bring a well-rounded..
Prepare the lessee''s 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.
Assume bradley link induced conversion : When the common stock price reached an all time high of $37 in December of 2014, 40% of the warrants were exercised.
Can rainbow recoup the unpaid amounts from basic explain : Despite this limit Rainbow sold ads to Basic through Icebox on credit. Basic paid Icebox for the ads, but Icebox did not pass all of the payments on to Rainbow. Icebox filed for bankruptcy. Can Rainbow recoup the unpaid amounts from Basic? Explain
Analysis of promotional program situation : I need a IMC plan on my Artistry Brand from Amway- Corporate Growth, Analysis of promotional program situation and Communications goals and objectives
Should they try to improve infrastructure : If they decide to go in the direction of challenging the moral climate, is that a form of "cultural imperialism"?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Net cash provided by operating activities

Compute net cash provided by operating activities using the direct method.

  Impact of risk on wacc

The Nunnally Company has equal amounts of low-risk, and high-risk projects. Nunnally estimates that is overall WACC is 12%. The CFO believes that this is the correct WACC for the company's average-risk projects

  Completion of accounting cycle

What are the steps in completing the accounting cycle? How do the different steps affect the financial statements?

  Compute the company''s fixed interest expense

Miller Company has a times interest earned ratio of 5. Sales and variable expenses were $57,290 and $40,105 respectively. Compute the company's fixed interest expense

  Brown company purchased common stock in black company brown

brown company purchased common stock in black company. brown company treats the investment as available-for-sale

  The company declared dividends of 6000 on preferred stock

burke company shows the following condensed income statement information for the year ended december 31 2010income

  There are many parts to an hr department not just for the

there are many parts to an hr department not just for the hiring process. theres the benefits office disability

  The following information relates to the

the following information relates to the manufacturingoperations of oshaunessy mfg co. during the month of march.

  Grey companys work in process inventory account has a

grey companys work in process inventory account has a beginning balance of 40000 and an ending balance of 50000.

  Williams corporation purchased a depreciable asset for

williams corporation purchased a depreciable asset for 400000 on january 1 2010. the estimated salvage value is 40000

  Why are the basic financial statements of a government u

why are the basic financial statements of a governmentu2014more so than those of a businessu2014inadequate as a basis

  What information can be found on a statement of

what information can be found on a statement of shareholders equity?a. details of assets and liabilities.b. a

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