Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2021. Hi-Tech manufactured the equipment at a cost of $92,500.

Other information:
Lease term 4 years
Annual payments $45,000 on January 1 each year
Life of asset 4 years
Fair value of asset $165,285
Implicit interest rate 6%
Incremental rate 6%
PV, annuity due, 3 periods, 8% 2.7833
PV, ordinary annuity, 3 periods, 8% 2.5771

There is no expected residual value.
Required:
Prepare appropriate journal entries for Southwestern Edison for 2021and 2022. Assume straight-line amortization and a December 31 year-end.

The following pertains to smoke, inc.’s investment in debt securities: on december 31, year 3, smoke reclassified a security acquired during the year for $70,000. it had a $50,000 fair value when it was reclassified from trading to available-for-sale. an available-for-sale security costing $75,000, written down to $30,000 in year 2 because of an other-than-temporary impairment of fair value, had a $60,000 fair value on december 31, year 3. what is the net effect of the above items on smoke’s net income for the year ended december 31, year 3?

Areal estate agent is considering changing her cell phone plan. there are three plans to choose from, all of which involve a monthly service charge of $20. plan a has a cost of $.42 a minute for daytime calls and $.17 a minute for evening calls. plan b has a charge of $.52 a minute for daytime calls and $.15 a minute for evening calls. plan c has a flat rate of $80 with 275 minutes of calls allowed per month and a charge of $.38 per minute beyond that, day or evening.a. determine the total charge under each plan for this case: 150 minutes of day calls and 70 minutes of evening calls in a month. (do not round intermediate calculations. round your answer to 2 decimal places. omit the "$" sign in your response.)c. if the agent will use the service for daytime calls, over what range of call minutes will each plan be optimal? (round each answer to the nearest whole number.include the indifference point itself in each answer.)d. suppose that the agent expects both daytime and evening calls. at what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans a and b?

Taking commercial paper means the holder acts honestly