Determine the present value of the lease payments

Assignment Help Accounting Basics
Reference no: EM132084123

Question - On June 30, 2016, Blue, Inc., leased a machine from Big Leasing Corporation. The lease agreement qualifies as a capital lease and calls for Blue to make semiannual lease payments of $281,454 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2016. Blue's incremental borrowing rate is 10%, the same rate Big uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year.

Determine the present value of the lease payments at June 30, 2016, (to the nearest $000) that Blue uses to record the leased asset and lease liability.

What would be the pretax amounts related to the lease that Blue would report in its balance sheet at December 31, 2016?

What would be the pretax amounts related to the lease that Blue would report in its income statement for the year ended December 31, 2016?

Reference no: EM132084123

Questions Cloud

How much interest revenue did the company record : The customer signed a 4-month note for $110,000 at 12%. How much interest revenue did the company record in the year 2017
What is the appropriate treatment of this item : The year-end for the DelRay audit is 30 June 2012, and the audit report is due to be signed on 14 August 2012. What is the appropriate treatment of this item
The organizational characteristics that influence training : Explain the organizational characteristics that influence training. Explain which of these characteristics you think is the most important and why.
Assessment section of your strategic plan : The goals will inform your SWOT Analysis and Assessment section of your strategic plan. What population is affected? Why?
Determine the present value of the lease payments : Determine the present value of the lease payments at June 30, 2016, (to the nearest $000) that Blue uses to record the leased asset and lease liability
Prepare the journal entry on april : Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2019. Prepare the journal entry on April 1, 2014
What is the amount of depreciation : Using the units-of-production method, what is the amount of depreciation that should be recorded for the second year
Suppose you just had a new addition to your family : Suppose you just had a new addition to your family. If you put away $600 a year ($50 a month) in an investment earning 10% per year
Regulate the money flow in an economy : What are the reasons that make it important such that governments have to regulate the money flow in an economy?

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.

  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!

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