Assume that ibm leased equipment that was carried at a cost of $195,000 to sharon swander company. the term of the lease is 7 years beginning january 1, 2017, with equal rental payments of $33,816 at the beginning of each year. all executory costs are paid by swander directly to third parties. the fair value of the equipment at the inception of the lease is $195,000. the equipment has a useful life of 7 years with no salvage value. the lease has an implicit interest rate of 7%, no bargain-purchase option, and no transfer of title. collectibility is reasonably assured with no additional cost to be incurred by ibm. assume the direct-financing lease was recorded at a present value of $195,000. prepare ibm’s december 31, 2017, entry to record interest.

Select the statement that indicates tina's company is a partnership. tina jones is a dancer specializing in latin dance styles. she always wanted to have her own dance studio where she could teach dancing to young and old alike. in 2006, she opened her first dance studio, electric diva, in madison triangle. it was a great choice as a business location because it's well-connected by highways to most places in the city. she leased the space for three years. her initial investment included a good sound system, cheerful interior design, and strong flooring. to raise capital for the business, tina turned to her brother-in-law, philip. philip made half the financial investment. he manages the accounts and social media needs of the business. he has a 30% share in trisha's business. together, they expanded the business to three dance studios in the city and plan to open franchises in other cities.

On january 1, 2018, jay company acquired all the outstanding ownership shares of zee company. in assessing zee's acquisition-date fair values, jay concluded that the carrying value of zee's long-term debt (8-year remaining life) was less than its fair value by $21,600. at december 31, 2018, zee company's accounts show interest expense of $14,440 and long-term debt of $380,000. what amounts of interest expense and long-term debt should appear on the december 31, 2018, consolidated financial statements of jay and its subsidiary zee? long-term debt $401,600 $398,900 $401,600 $398,900 interest expense $17,140 $17,140 $11,740 $11,740 a. b. c. d.

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