Business, 24.08.2021 03:30 Aethis

Krawczek Company will enter into a lease agreement with Heavy Equipment Co. where Krawczek will make lease payments over the next five years. The lease is cancelable and requires equal annual payments of $32,000 per year beginning on January 1 of the first year. The last payment will be January 1 of year 5, and Krawczek will continue to use the asset until December 31 of that year. Other important information includes the following: The fair value of the equipment is $215,000.
The applicable discount rate is an 8 percent annual rate.
The economic life of the asset is 10 years.
Krawczek does not guarantee the residual value of the asset at the end of the lease, and it does not expect to keep the asset at the end of the term.
The asset is a standard piece of equipment.
a. Is the lease an operating lease or a financing lease?
Operating lease
Financing lease
b. What will be the lease expense shown on the income statement at the end of year 1?
c. What will be the interest expense shown on the income statement at the end of year 1? (Leave no cells blank – be certain to enter "0" wherever required.)
d. What will be the amortization expense shown on the income statement at the end of year 1? (Leave no cells blank – be certain to enter "0" wherever required.)

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 14:00

List five words to describe your dominant culture. list five words to describe a culture with which you are not a member, have little or no contact, or have limited knowledge. can someone explain what its meaning?

Answers: 1

Answer

Business, 21.06.2019 18:20

Which of the following housing decisions provides a person with both housing and an investment? a. selling a share in a cooperative. b. buying a single-family home. c. renting an apartment. d. subletting a condominium. 2b2t

Answers: 2

Answer

Business, 21.06.2019 19:30

Why does the united states government provide tax breaks related to the amount of money companies spend on research and development? a. to provide incentives for companies to conduct research and development to allow antitrust authorities b. to challenge joint research efforts c. to protect the right of inventors d. to produce and sell their inventions e. to involve less government scrutiny than a government funded project

Answers: 1

Answer

Business, 22.06.2019 05:50

Cosmetic profits. sally is the executive vice president of big name cosmetics company. through important and material, nonpublic information, she learns that the company is soon going to purchase a smaller chain of stores. it is expected that stock in big name cosmetics will rise dramatically at that point. sally immediately buys a number of shares of her company's stock. she also tells her friend alice about the expected purchase of stores. alice wanted to purchase stock in the company but lacked the funds with which to do so. although she did not have the funds in bank a, alice decided to draw a check on bank a and deposit the check in bank b and then proceed to write a check on bank b to cover the purchase of the stock. she hoped that she would have sufficient funds to deposit before the check was presented for payment. of which of the following offenses, if any, is alice guilty of by buying stock?

Answers: 2

Answer

You know the right answer?

Krawczek Company will enter into a lease agreement with Heavy Equipment Co. where Krawczek will make...

Questions