Prepare the appropriate journal entries

Assignment Help Financial Management
Reference no: EM131456168

Diablo Company leased a machine from Juniper Corporation on January 1, 2016. The machine has a fair value of $26,000,000. The lease agreement calls for four equal payments at the end of each year in the amount of $8,560,095. The useful life of the machine was expected to be four years with no residual value. The appropriate interest rate for this lease is 12%.

Required:

Prepare the appropriate journal entries.

Reference no: EM131456168

Questions Cloud

Interest rate on deposits and loans : A freind asks to borrow $50 from you and in return will pay you $53 in one year. If your bank is offering a 5.8% interest rate on deposits and loans:
Determine the amount of each lease payment : Determine the amount of each lease payment and Record appropriate journal entries
The cash flow timeline look like from your perspective : What does the cash flow timeline look like from your perspective? what does it look like from the banks perspective?
How does convertble securities dowisidecomes : In today's capital maret, how does convertble securities dowisidecomes in the form of how investors are paid if the company goes belly up.
Prepare the appropriate journal entries : The useful life of the machine was expected to be four years with no residual value. Prepare the appropriate journal entries.
Should the investors buy this stock : The dividend is then expected to grow at a constant rate of 7% forever. Should the investors buy this stock?
What is its present value if other investments of equal risk : What is its present value if other investments of equal risk earn 8 percent annually?
Leased a building under a three-year operating lease : On January 1, 2016, Holbrook Company leased a building under a three-year operating lease.
What is the firms required return : Palladian Records has a beta of 0.8. The current T-bond rate is 2.4%. what is the firm's required return?

Reviews

Write a Review

Financial Management Questions & Answers

  What are net cash flows of the project each year

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,310,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life. What are the net cash flows of ..

  Before-tax operating costs and mainly labor

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $230,000. The truck falls into the MACRS 5-year class, and it will be sold after 5 years for $23,000. The truck will have no ..

  Determine the equivalent equal monthly payment series

Suppose that you barrow $17,000 at 15% compounded monthly over four years. Knowing that the 15% represents the market interest rate, you realize that the monthly payment in actual dollars will be $473.12. If the average monthly general inflation rate..

  The impact of major eents from the recent financial

The impact of major eents from the recent financial crisis on credit default swaps

  What are the nominal interest rate on the bill

Suppose that on January 1, 2013. the price of a one-year Treasury bill is $970.87. Investors expect that the inflation rate will be 2% during 2013, but at the end of the year, the inflation rate turns out to have been 1%. What are the nominal interes..

  Under what conditions will you exercise the option

You are receiving fixed on a 3-year swap at 1% versus Libor. You pay 50 bps upfront for a one year option to pay fixed at 1% for 2 years. Under what conditions will you exercise the option? If you do not exercise the option, what is your annualized r..

  Discounted payback period if discount rate is zero percent

An investment project costs $10,000 and has annual cash flows of $2,990 for six years. What is the discounted payback period if the discount rate is zero percent? Discounted payback period years What is the discounted payback period if the discount r..

  What will be your rate of return if price of telecom stock

You are bullish on Telecom stock. The current market price is $44 per share, and you have $2,200 of your own to invest. You borrow an additional $2,200 from your broker at an interest rate of 5.5% per year and invest $4,400 in the stock. What will be..

  Accounting statements can be manipulated

Accounting statements can be manipulated. Please try to give an argument pro and con on this ethical issue. Any actual public examples you would like to cite would be most appreciated by all. Scenario: Enron utilized Special Purpose Entities (SPE) in..

  Distribution cost of the current distribution system

New Light began in 1943 in a garage workshop set up by Roy Williamson at his Denver home. Roy had always enjoyed tinkering, and in February 1948 he obtained a patent for one of his designs for lighting fixtures. What is the annual inventory and distr..

  Estimated instrinic value per share of common stock

ABC Telecom Inc. is expected to generate a free cahs flow (FCF) of $9,900.00 million this year (FCF?1 ?= $9,900.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF2 and FCF3?). ABC Telecom Inc. debt has ..

  What will be the present value of the tax shield

A triple A rated company borrows $100 millions interest only loan for a 10 year period at fixed rate of 5.5 percent. Assuming the company is in the 35 percent tax bracket. What will be the present value of the tax shield over the ten year period assu..

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