Prepare the journal entries for dufferin for the first year

Assignment Help Accounting Basics
Reference no: EM132768199

Question: On January 1, 2020, Dufferin Corp. enters into a 10-year non-cancellable lease with Pine Ltd. to lease equipment with an estimated useful life of 11 years and a fair value of $6,000,000. The borrowing rate on the lease is 8%. Dufferin uses the straight-line method to depreciate assets. The lease contains the following provisions:

- Semi-annual lease payments of $438,000 (the payments include $38,000 for property taxes), payable on January 1 and July 1 of each year.

- A guarantee by Dufferin Corp. that Pine Ltd. will realize $200,000 from selling the asset at the expiration of the lease.Both companies adhere to IFRS.

Instructions: - Calculate the present value of the minimum lease payments over the life of the lease. Round to the nearest dollar.

- What kind of lease is this to Dufferin Corp.? Why?

- Provide a lease amortization schedule for the full lease. You should prepare your schedule using Excel and copy it into your Word document. The lease amortization schedule provides you an opportunity to check that your present value calculation is correct.

- Prepare the journal entries for Dufferin for the first year of the lease.

Reference no: EM132768199

Questions Cloud

Analyze the current health care delivery structure : Analyze the current health care delivery structure in your state. Compare and contrast the major determinants of health care market power.
What is human resource planning : What is Human Resource Planning (HRP)? Describe the HRP process, as well as how HRP is related to other human resource activities. How do governments influence.
What is the nature of hanks gain on the subsequent sales : Hank Corporation assists its relocated executives by buying their homes from them at the appraised value if an acceptable sale cannot be completed before their.
Compute the ending inventory using given details : Presented below is information related to Ivanhoe Corporation for the current year. Beginning inventory$ 606,900Purchases1,503,500Total goods available for sale
Prepare the journal entries for dufferin for the first year : On January 1, 2020, Dufferin Corp. enters into a 10-year non-cancellable lease with Pine Ltd. to lease equipment with an estimated useful life of 11 years.
Define substantive procedures to obtain sufficient evidence : Pineapple Beach Hotel Co. (Pineapple) operates a hotel providing accommodation, leisure facilities, and restaurants. Its year end was April 30, 2016.
Prepare the balance sheet and income statement : The owner invested P200,000 cash to the business. The business obtained a 12%, one-year, bank loan of P300,000 on October 1, 20x1.
What is the total manufacturing cost per clock : Colonial Company manufactures decorative wall clocks and uses activity-based costing. Each clock consists of 20 separate parts totaling $95 in direct materials.
What is carol''s outside basis following the distribution : In 2002, Carol and Alice formed C&A partnership by contributing cash. Note: neither of them contributed property using Sec. 721.

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