Business, 25.02.2020 16:56 cecil13

ABC Co. specializes in leasing large storage units to other businesses. ABC entered a contract to lease a storage unit to Smith, Inc. for 4 years when that particular storage unit had a remaining useful life of 5 years. The fair value of the unit was $16,000 at the commencement of the lease on January 1, 2017. The present value of the five equal rental payments of $4,204 at the start of each year, plus the present value of a guaranteed residual value of $1,000, equals the fair value of $16,000, ABC's implicit rate of return on the lease of 7%. The following is a correct, complete amortization schedule created by ABC.
Date Lease Payment Interest (7%) on Reduction of Balance of
- Outstanding Lease Receivable Lease Receivable Lease Receivable
1/1/17 $16,000
1/1/17 $4,204 $4,204 11,796
1/1/18 4,204 $826 3,378 8,418
1/1/19 4,204 589 3,615 4,803
1/1/20 4,204 336 3,868 935
12/31/20 1,000 65 935 0
$17,816 $1,816 $16,000
Required:
1. Given the above schedule, make the appropriate entries at December 31, 2020, to record the accrual of interest and the return of the storage unit to Pharoah (assuming the unit is returned on December 31, 2020, at the expected and guaranteed residual value of $1,000).

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 20:30

The law of demand is the assertion that ?

Answers: 3

Answer

Business, 22.06.2019 10:30

Describe three scenarios in which you might utilize mathematics to investigate a crime scene, accident scene, or to make decisions involving police practice. be sure to explain how math is used in police as they work through each scenario.

Answers: 1

Answer

Business, 22.06.2019 17:50

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.

Answers: 3

Answer

Business, 22.06.2019 19:50

The interaction of individual choices because a type of fish is on the verge of extinction, the government imposes rules that prohibit fishing in the publicly owned spawning grounds. at first owners of fshing bouts complain about this restriction on where they can fish, but soon they notice that the number of adult fish swimming outside the protected area is much higher than it was before. with the restriction, each fishing boat ends up catching more fish than it did before the r which of the following principles of economic interaction best describes this scenario? o there is a tradeoff between equality and efficiency o markets usually lead to efficiency. o when markets do not achieve efficiency,government intervention can improve overall welfare o markets allocate goodseffectively

Answers: 1

Answer

You know the right answer?

ABC Co. specializes in leasing large storage units to other businesses. ABC entered a contract to le...

Questions