Problem related to direct-financing lease

Assignment Help Accounting Basics
Reference no: EM13147040

On January 2,2011,Gold Star Company leases equipment to Brick Co.with 5 equal annual payments of $40,000 each,payable beginning December 31,2011.Brick Co. agrees to guarantee the 25,000 residual value of the asset at the end of the lease term. Brick's incremental borrowing rate is 10%,however it knows that Gold Star's implicit interest rate is 8%.What journal entry would Gold Star make at January 2,2011 assuming this is direct-financing lease?

Reference no: EM13147040

Questions Cloud

Find the molecular weight of the unknown compound : Find the molality of the solution. Find the molecular weight of the unknown compound please show steps
Compute the expected new net income : As a result, they estimate that gross profit will increase by $37,605 and operating expenses by $62,595. Compute the expected new net income. (Hint: You do not need to prepare an income statement).
Explain the freezing point of pure carbon tetrachloride : When 5.0 g of an unknown compound is dissolved in 200.0 g of carbon tetrachloride, CCl4, the freezing point of the solution is -31.8 degC. The freezing point of pure carbon tetrachloride is -22.3degC
Approximately how many packets of crisps are equivalent : For an average low activity 5-year-old boy approximately how many packets of crisps are equivalent to one day's energy needs? You should give your answer to the nearest whole number. You will need to refer to data in the Tables found in the course..
Problem related to direct-financing lease : Brick's incremental borrowing rate is 10%,however it knows that Gold Star's implicit interest rate is 8%.What journal entry would Gold Star make at January 2,2011 assuming this is direct-financing lease?
Calculate kp for this reaction : Nitrosyl chloride (NOCl) decomposes at elevated temperatures according to the equation 2NOCl(g) ->2NO(g) + Cl2(g). Calculate Kp for this reaction at 680°C.  (For this reaction ΔH° = 81.2 kJ/mol, ΔS° = 128 J/K·mol)
What is muscle tetanus : In aquatic gas exchange across gills, how does countercurrent exchange improve the uptake of O2 that otherwise would be lost with concurrent exchange?
Prepare income statement in a multiple step format : Quartz Co. sells home furniture had the following account balances: Required: Prepare income statement in a multiple step format.
Conduct an analysis of the demand : Conduct an analysis of the demand for the organization's product(s) and/or services - Discussing the source of your numerical price and other data

Reviews

Write a Review

Accounting Basics Questions & Answers

  Journal entry for sale

Orbit Airways purchased a baggage-handling truck for $41,000. Suppose Orbit sold the truck on December 31, 2008, for $28,000 cash, after using the truck for two full years and accumulating a depreciation of $16,000.

  Information about basic accounting

Management uses accounting information to run the business (and be sure they get bonuses based on profitability ) stockholders use it to be sure they continue to have a sound investment, a banker may use it to monitor credit trends and for compari..

  Sold land and subsidiary for a gain

Parent sold land to its subsidiary for a gain in 2007. The subsidiary sold the land externally for a gain in 2010. Which of the following statements is true?

  Compute accrual-basis net income

Of the amount paid, $30,000 was for expenses incurred on account in 2010. In addition, Leno incurred $142,000 of expenses in 2011 which will not be paid until 2012.

  Theoretical justification for consolidated financial stateme

Which of the following is the best theoretical justification for consolidated financial statements?

  Explain how the accounting equation is impacted

Adjusting Entries are required at the end of the period to ensure that accrual accounting principles are applied. The rent is prepaid for three months at $1,200 per month.

  Difference in taxable income and cash inflow

Calculate the difference in taxable income and cash inflow under each method. Assume MACRS allowances are 20, 32, 18, 15, and 15 percent for years 1-5 respectively.

  Amount of federal income taxes

Cal Ruther, an employer, is subject to FICA taxes but exempt from FUTA and SUTA taxes. During the last quarter of the year, his employees earned monthly wages of $8,500, all of which is taxable. The amount of federal income taxes withheld each mon..

  What sales are needed by cunningham to break even

Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $60,000. What sales are needed by Cunningham to break even?

  Computing bell income when equity method is applied

Assume the equity method is applied. Compute Bell's income from Demers for the year ended December 31, 2008.

  Face value of one bond

Capius Corporation issued 2000 bonds in $1000 individual denominations. Each bond has twenty detachable warrants. The bonds and warrants were sold at 110. At the time the bond were issued each warrant had a market value to one percent of the face ..

  Total net income for combined three-year period

What is the error in total net income for the combined three-year period resulting from the inventory errors? Explain why the understatement of inventory by $56,000 at the end of 2007 results in an understatement of equity by the same amount in th..

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