Reference no: EM132985665
Presented below are three different lease transactions in which Ortiz Enterprises engaged in 2010.Assume that all lease transactions start on January 1, 2010.In no case does Ortiz receive title to the properties leased during or at the end of the lease term.
Lessor Renner Co. Flynn Co. Miley Inc. Type of property Bulldozer Truck Furniture Bargain purchase option None None None
Lease term 4 years 6 years 3 years
Estimated economic life 8 years 7 years 5 years
Yearly rental $13,000 $20,000 $ 3,000
Fair market value of leased asset $80,000 $96,000 $20,500
Present value of the lease rental payments $48,000 $82,000 $ 9,000
Instructions
Problem (a) Identify the leases above as operating or capital leases. Explain.
Problem (b) How should the lease transaction for Flynn Co. be recorded on January 1, 2010?
Problem (c) How should the lease transaction for Miley Inc. be recorded in 2010?
Compute the amount at the end of the period
: Compute the amount at the end of the period (n is the number of years) p=$3400, i=4.07%, p.a. compounded yearly, n=28. $10,389.5
|
Find what is the owner equity at the end of the year
: During the year assets increased $75,000 and liabilities decreased $22,500. Find What is the owner's equity at the end of the year?
|
What was the owner equity at the end of the year
: Owner's equity of $96,000. If assets increased by $40,000 and liabilities decreased by $30,000, what was the owner's equity at the end of the year?
|
Make the journal entry to record the issuance of the bond
: Wheeler uses the effective-interest method to amortize bond premium. Prepare the journal entry to record the issuance of the bonds on July 1, 2010.
|
How should the lease transaction for flynn co be recorded
: How should the lease transaction for Flynn Co. be recorded on January 1, 2010? How should the lease transaction for Miley Inc. be recorded in 2010?
|
Experiencing distributive fairness
: Provide an example of an employee who is experiencing distributive fairness but not procedural fairness and also give an example of an employee who is experienc
|
Determine the change in gross profit
: Using vertical analysis of the income statement for Sadie Company, determine the change in gross profit. The income statement information is for Sadie Company
|
How social business and big data can help organization
: Explain with specific examples how Social Business and Big Data can help your organization (or an organization you are familiar with) maintain a competitive edg
|
What bond interest expense of the first year is
: Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is
|