What is the amount of interest expense recorded

Assignment Help Accounting Basics

Reference no: EM13124858

Pirate, Inc. leased equipment from Shoreline Enterprises under a four-year lease requiring equal annual payments of $180,000, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. Pirate, Inc.'s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Assuming that this lease is properly classified as a capital lease, what is the amount of interest expense recorded by Pirate, Inc. in the first year of the asset's life?

Reference no: EM13124858

Questions Cloud

List out items that must certified by corporate management : List out the items that must be certified by corporate management in accordance with the provisions of the Sarbanes-Oxley Act. Discuss how these responsibilities have likely changed the period-to-period activities of the certifying managers.

Complementary angles and systems of equations : Two angles are complementary of each other. Twice one angle is equal to the other angle plus the product of three and five. Set up a system of linear equations to represent the two angles.

How long will it take for pressure drop : If a 2.1 L reaction vessel initially contains 725 torr of cyclopropane at 485 degrees C , how long will it take for the partial pressure of cylclopropane to drop to below 102 torr .

Probability to win the chess match : Probability of 0.3, and is a draw with probability of 0.3, independently of the previous games. What is the probability that Fischer wins the match?

What is the amount of interest expense recorded : what is the amount of interest expense recorded by Pirate, Inc. in the first year of the asset's life?

Illustrate what is the par per share after the split : Prepare the journal entry to record the stock split if it is not to be effected in the form of a stock dividend. Illustrate what is the par per share after the split? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Row reduced echelon form : Calculate the reduced row echelon form of the following matrices. Approximate answers should be entered to at least 4 decimal places.

Basics related to internal auditors : Early in January 2011, the internal auditors for Arkansas Inc. discovered these errors and omissions in their review of the 2010 financial records. Arkansas Inc. has not yet closed its books for 2010.

Word problems and systems of equations : At the the Pittsburg zoo, children ride a train for 25 cents, adults pay $1.00, and Senior citizens 75 cents. On a given day, 1400 passengers paid a total of $740 for the rides.

User Account

All Pages