Would it be acceptable for a company to account for a

Reference no: EM13613028

On July 1, Pine Region Dairy leased equipment from Farm America for a period of three years. The lease calls for monthly payments of $2,500 payable in advance on the first day of each month, beginning July 1. Prepare the journal entry needed to record this lease in the accounting records of Pine Region Dairy on July 1 under each of the following independent assumptions:

a. The lease represents a simple rental arrangement.

b. At the end of three years, title to this equipment will be transferred to Pine Region Dairy at no additional cost. The present value of the 36 monthly lease payments is $76, 021, of which $2,500 is paid in cash on July 1. None of the initial $2,500 is allocated to interest expense.

c. Why is situation A, the operating lease, sometimes called off-balance sheet financing?

d. Would it be acceptable for a company to account for a capital lease as an operating lease to report rent expense rather than a long-term liability?

Reference no: EM13613028

Questions Cloud

Last year vera corporation budgeted for production and : last year vera corporation budgeted for production and sales of 20000 cloth handbags. vera produced and sold 19250

A parallel-plate capacitor is designed so that the plates : a parallel-plate capacitor is designed so that the plates can be pulled apart. the capacitor is initially charged to a

The maximum temperature is 1200k and minimum is 290k the : a stationary gas turbine power plant operates on the brayton cycle and deliveres 20 mw to an electric generator. the

If you disconnect the battery and separate the plates to a : you make a capacitor by cutting the 12.5-cm-diameter bottoms out of two aluminum pie plates separating them by 3.50mm

Would it be acceptable for a company to account for a : on july 1 pine region dairy leased equipment from farm america for a period of three years. the lease calls for monthly

A gas turbine power plant operates on the simple brayton : a gas turbine power plant operates on the simple brayton cycle between tmin300k and tmax1073 ka find the maximum work

A parallel-plate air capacitor has a capacitance of 500pf : a parallel-plate air capacitor has a capacitance of 500pf and a charge of magnitude 0.250uc on each plate. the plates

Which of the machines is most attractive based on its : heartland paper company is considering the purchase of a new high-speed cutting machine. two cutting machine

For a projectile launched horizontally which of the : for a projectile launched horizontally which of the following best describes the vertical component of a projectiles

User Account

All Pages