User Account

All Pages

What will be the balances in the balance sheet accounts

Assignment Help Accounting Basics
Reference no: EM132670151

Problem - At January 1, 2018, Cafe Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $26,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2025. The equipment was acquired recently by Crescent at a cost of $180,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $21,925.) Crescent seeks a 9% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease.

Required -

1. What will be the effect of the lease on Crescent's (lessor's) earnings for the first year?

2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Crescent?

Reference no: EM132670151

Questions Cloud

Question - Corporate Formations Problem : Question - Corporate Formations Problem - Mary will receive 60% and Todd 40% of the corporate stock. VARIATION 1: return to original facts (no Karla)
How recommend effective internal control for each condition : Describe the possible reasons for these identified conditions above and recommend effective internal control(s) for each condition
Define the term materiality : Define the term materiality. describe what materiality means in the context of an audit. The response must be typed, double spaced.
Does pablo have to pay australian tax on any of salary : During the year, he earned the equivalent of A$120,000 from his employment. Does Pablo have to pay Australian tax on any of his salary?
What will be the balances in the balance sheet accounts : What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Crescent
Traditional credit ratings and big data credit ratings : What is the difference between traditional credit ratings and big data credit ratings.
Why accounting researchers criticize legitimacy theory : Why critical accounting researchers criticize legitimacy theory? What method would most likely be used if conceptual framework were the overriding regulations?
How the entity addresses industry : How the entity addresses industry, regulator, and other external factors that affect it, and consider the effects of implementing a strategy
Company pretax cost of debt-icu window inc : Hoolahan Corporation's common stock has a beta of 1.19. Assume the risk-free rate is 5.4 percent and the expected return on the market is 12.9 percent.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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