Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (6th Edition)
Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (6th Edition)
6th Edition
ISBN: 9780134642857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 10, Problem 10.18AP

1.

To determine

Held-to-maturity Debt investments:

Held-to-maturity debt investments are the investments in debt securities, where the investor wishes to hold till the maturity. They are treated either as current assets or long-term assets.

To journalize: The transactions of the Company SB related to the bonds for the year 2018.

2.

To determine

 To journalize: The entry required on the Corporation M bonds maturity date.

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Question 1. Pearl Leasing Company agrees to lease equipment to Martinez Corporation on January 1, 2025. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2 The cost of the machinery is $541,000, and the fair value of the asset on January 1, 2025, is $760,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $45,000, Martinez estimates that the expected residual value at the end of the lease term will be $45,000. Martinez amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2025. 5. The collectibility of the lease payments is probable. 6. Pearl desires a 10% rate of return on its investments. Martinez's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown.  Annual rental payment is…
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Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (6th Edition)

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