Question 28 Whiteside Corporation issues $ 629,000 of 9 % bonds, due in 14 years, with interest payable semiannually. At the time of issue, the annual market rate for such bonds is 10 %. Compute the issue price of the bonds.( Use the present value tables in the text.
Question 29 Indiana Jones Company enters into a 6-year lease of equipment on January 1, 2012, which requires 6 annual payments of $ 37,560 each, beginning January 1, 2012. In addition, the lessee guarantees a residual value of $ 20,870 at lease-end. The equipment has a useful life of 6 years. Assume that for Lost Ark Company, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning costs, and the carrying amount of the machinery is $ 191,722. Prepare Lost Ark’ s January 1, 2012, journal entries.
Question 30 On January 1, 2012, Irwin Animation sold a truck to Peete Finance for $ 26,050 and immediately leased it back. The truck was carried on Irwin’ s books at $ 20,800. The term of the lease is 5 years, and title transfers to Irwin at lease-end. The lease requires five equal rental payments of $ 7,048 at the end of each year. The appropriate rate of interest is 11 %, and the truck has a useful life of 5 years with no salvage value. Prepare Irwin’ s 2012 journal entries.
SET 2
1) Which of the following is considered cash? 2) Bank overdrafts, if material, should be 3) Which of the following is NOT considered cash for financial reporting purposes? 4) If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as 5) Which of the following methods of determining annual bad debt expense best achieves the matching concept?