User Account

All Pages

How to record interest expense and amortization

Assignment Help Accounting Basics
Reference no: EM132431246

Question - Skysong enters into an agreement with Traveler Inc. to lease a car on December 31, 2016. The following information relates to this agreement.

1. The term of the non-cancelable lease is 4 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term.

2. The fair value of the car was $14,200 at commencement of the lease.

3. Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2017. The first payment is to be of an amount of $5,256.50, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $5,519.33 and the third and final payment will be $5,795.30).

4. Skysong' incremental borrowing rate is 8%. The rate implicit in the lease is unknown.

5. Skysong uses straight-line depreciation for all similar cars.

How to prepare journal entries for 2016, 2017, 2018?

How to record interest expense, and amortization of the right-of-use-asset?

Reference no: EM132431246

Questions Cloud

What would be the mix of stocks chosen by you : Management has required a 12% Return on Investments for 2017. What would be the mix of stocks chosen by you
The policy practice or advocacy Assignment : The policy practice or advocacy Assignment help and solutions:-Is continued policy practice/advocacy needed to make a long-term impact?
How many shares do you need to guarantee : How many shares do you need to guarantee that you will be elected to the board? Explain the complete solution of this problem.
What is the price of the bonds : The bonds have a par value of $10,000. If we assume semiannual compounding, what is the price of the bonds? Please explain the complete solution of this problem
How to record interest expense and amortization : Skysong uses straight-line depreciation for all similar cars. How to record interest expense, and amortization of the right-of-use-asset
Discuss the concept of organisational compliance : Addresses elements of required skills and knowledge as shown in the Assessment Matrix - Summary of the regulator and compliance framework for financial services
Decision to be described as a signal : Is this a signal? Why? What criteria can you identify as being necessary for a decision to be described as a signal?
Link between return on capital expenditure and the returns : Why does the cost of capital constitute a direct link between return on capital expenditure and the returns required by capital investors?
What type of income is robin ltd earning : Prior to the incorporation of Robin Ltd both Shari and David were employed by Faith Ltd. in the accounting department. What type of income is Robin Ltd. earning

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: +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