Reference no: EM132969736
Questions -
Q1. On January 1, Year 1, Nano Company as lessee signed a five-year noncancelable equipment lease with annual payments of $100,000 beginning December 31, Year 1. Nano Company treated this transaction as a capital lease. The five lease payments have a present value of $389,000 at January 1, Year 1, based on interest of 10%. What amount should Nano Company report as interest expense for the year ended December 31, Year 1?
a. $38,900
b. $27,900
c. $24,200
d. None of the above
Q2. Calculate pension expense using the following amounts.
Service Cost $506,000
Excess Amortization of Deferred Loss $115,000
Amortization of Prior Service Cost $17,000
Interest on Projected Benefit Obligation $987,000
Return on Plan Assets $422,000
a. $1,061,000
b. $2,047,000
c. $1,203,000
d. None of the above