Question is below Financial Accounting Question:On January 1, 2016, Hen Corp., a lessor, signed a direct financing lease. Hen wasto receive annual year-end payments of $10,000 for ten years, after which therewas a guaranteed residual value of $8,000. The implicit interest rate was 8%.Actuarial information for 8%, ten periods follow:Present value of an ordinary annuity of $1 6.71008Present value of the amount of $10.46319On January 1, 2016, what amount should Hen record as a debit to LeaseReceivable?

Explanation of Direct Financing Lease: This is a type of lease where the lessor (in this case, Hen…

Answered: Financial Accounting Question: On…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.
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On January 1, 2021, Pindang Co. received a P1,000,000, noninterest bearing note inexchange land with carrying amount of P1,000,000. The note is due in four equal annual installments every December 31. The effective interest rate is 15%. The present value of ordinary annuity of 1 at 15% for 4 periods is 2.855Requirements:1. Prepare the amortization table.2. Determine the current and non-current portions of the note on December 31,2021.3. Provide all the necessary journal entries.
d. The interest income to Diggs Co. at December 31, 2020 is ?
Problem 6: On January 1, 2019, South company acquired a building for P5,000,000. South company paid P500,000 down and signed noninterest bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The prevailing interest rate for a note of this type is 12%. The present value of an ordinary annuity of 1 for three periods is 2.4018. Required: Prepared journal entries to record: 1. Purchase of building on January 1, 2019 2. First installment payment on December 31, 2019 3. Interest expense for 2019 _______________________________
DAM Corporation, a lending institution, provided a loan to LAP company for $5,000,000 on Januray 1,2020. The loan has a term of 5 years with interest collectible annualy at 10%. Payment of principal will be equal installments at end of the yearDirect origination cost 20,445Origination fee 80,309Effective interest rate 10.50% Requirement:- Prepare the journal entry
2
For items 11 to 12 LYR Finance Company reports a loan receivable from Choice Company in the amount of P7,500,000. The initial loan's repayments include a 10% interest rate plus annual principal payment of P1,500,000 on January 1 of each year. The loan was made on January 1, 2021. Choice made the P750,000 interest payments for 2021 but did not make the P1,500,000 principal payment nor the P500,000 interest payment in 2022. Choice is having financial difficulty and LYR has concluded that the loan is impaired. Analysis of Choice's financial condition on December 31, 2022 indicates that the principal and interest currently due can be collected but it is probable that no further interest can be collected. The probable amounts and timing collection are determined as follows: December 31, 2023 December 31, 2024 December 31, 2025 Total P2,140,000 3,400,000 2,950,000 P8,490,000 The present value factors at 10% are as follows: 1 period - 0.909; 2 periods 0.826; 3 periods - 0.751 How much is the…

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