User Account

All Pages

What is the classification of this lease and why

Assignment Help Accounting Basics
Reference no: EM132959049

Problem - On January 1, 2020, Kara Danvers leased an airplane from Diana Prince. The lease terms are as below.

Lease Term (yrs) 10 Guaranteed Residual Value $0 Minimum Lease Payment $250,000 Expected Residual Value $300,000 Fair Value $2,000,000 Lessee Attorney Fees (on 1/1/2020) $15,000 Asset Cost (on Stitch's Books) $1,650,000 Ownership at End of Lease Diana Prince Asset Life (yrs) 15

If applicable, Diana Prince depreciates all assets on a straight-line basis. Kara Danvers uses 9% as its required rate of return when calculating lease returns. Diana Prince has an 10% imputed interest rate and Kara Danvers is aware of this. All amounts are paid on January 1 of each year. Both Danvers and Prince have December 31 year-ends.

REQUIRED - Answers the following for Kara Danvers:

1. What is the classification of this lease and why? (show all 5 tests)

2. What is the journal entry for January 1, 2020?

3. What is the journal entry for December 31, 2020?

4. What is the journal entry for January 1, 2021?

5. What is the journal entry for December 31, 2021?

Reference no: EM132959049

Questions Cloud

What is the closing balance of cash at the end of the day : On the same day, he was able to sell 24 lamps for £8 each in cash. What is the closing balance of cash at the end of the day's trading on 1 May
Which is correct for jefferson : Which is correct for Jefferson? Jefferson uses the percent of method of estimating uncollectible expenses. 2% of credit sales are expected to be uncollectible
What is the variable overhead rate variance : During December 2020, Robin's Ribbons sells 200 giant bows. Materials Purchased: 3,200 yards @ $1.20/yard $3,840. What is the Variable Overhead Rate Variance
What adjustment to record bad debt expense for company : If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a
What is the classification of this lease and why : Problem - On January 1, 2020, Kara Danvers leased an airplane from Diana Prince. What is the classification of this lease and why
What the entry make is to assuming use the allowance method : Account Receivable balance of $100 has gone bankrupt and will not make any future payments. Assuming you use the allowance method, the entry you make is to
Calculate the adjusted cash balance per books on september : Calculate the adjusted cash balance per books on September 30. Gunnar Company gathered the reconciling information in preparing its September.
What is the maximum price an investor should pay : Based on the information provided, what is the maximum price an investor should pay for shares in the company today? (Show all workings)
Which would be subtracted from the balance per bank : Which would be subtracted from the balance per bank on a bank reconciliation? Which would be subtracted from the balance per books

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.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd