![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Please both subparts answer without plagiarism please i give positive rating definitely
![QUESTION 4
Billy Joe Company leases a machine from Bobby Sue Corp. under an agreement which meets the criteria to be a finance lease for Billy Joe.
The six-year lease requires payment of $116,000 at the beginning of each year.
The incremental borrowing rate for the lessee is 10%; the lessor's implicit rate is 8% and is known by the lessee.
The present value of an annuity due of 1 for six years at 10% is 4.79079. The present value of an annuity due of 1 for six years at 8% is 4.99271. Billy Joe should record a Right-Of-Use Asset at inception for:
O $679,008.
O $651,548.
O $579,154.
O $555,732.
QUESTION 5
On January 1, 2015, Cape Cod Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Cape Cod to make annual payments of $150,000 at the beginning of each year for five
years with the title passing to Cape Cod at the end of this period.
The equipment has an estimated useful life of 7 years and no salvage value. Cape Cod uses the straight-line method of depreciation for all of its fixed assets. Cape Cod appropriately accounts for this lease transaction as
a finance lease.
The lease payments were determined to have a present value of $625,479 at an effective interest rate of 10%.
In 2016, Cape Cod should record interest expense of
$32,547.
O $37,303.
O $47,548.
O $52,302.](https://content.bartleby.com/qna-images/question/d80ccd3b-f207-4569-a0c9-dab8b67382eb/895287f6-09a1-4b1a-acb2-47deab33ebe3/b14ao3_thumbnail.png)
Transcribed Image Text:QUESTION 4
Billy Joe Company leases a machine from Bobby Sue Corp. under an agreement which meets the criteria to be a finance lease for Billy Joe.
The six-year lease requires payment of $116,000 at the beginning of each year.
The incremental borrowing rate for the lessee is 10%; the lessor's implicit rate is 8% and is known by the lessee.
The present value of an annuity due of 1 for six years at 10% is 4.79079. The present value of an annuity due of 1 for six years at 8% is 4.99271. Billy Joe should record a Right-Of-Use Asset at inception for:
O $679,008.
O $651,548.
O $579,154.
O $555,732.
QUESTION 5
On January 1, 2015, Cape Cod Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Cape Cod to make annual payments of $150,000 at the beginning of each year for five
years with the title passing to Cape Cod at the end of this period.
The equipment has an estimated useful life of 7 years and no salvage value. Cape Cod uses the straight-line method of depreciation for all of its fixed assets. Cape Cod appropriately accounts for this lease transaction as
a finance lease.
The lease payments were determined to have a present value of $625,479 at an effective interest rate of 10%.
In 2016, Cape Cod should record interest expense of
$32,547.
O $37,303.
O $47,548.
O $52,302.
Expert Solution
![Check Mark](/static/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 4 steps
![Blurred answer](/static/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- I need answer typing clear urjent no chatgpt used i will give upvotes all answers plsarrow_forwardHow would I calculate this problem? I just guessed on which answer made sense to me. Please help. thank you in advance.arrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forward
- help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forwardhrl.3 answer must be in proper format or i will give down votearrow_forwardIt says they answers are wrong from your example.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
![Text book image](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education