Questions from Intermediate Accounting

Q: Rick Kleckner Corporation recorded a capital lease at $300,000

Rick Kleckner Corporation recorded a capital lease at $300,000 on January 1, 2017. The interest rate is 12%. Kleckner Corporation made the first lease payment of $53,920 on January 1, 2017. The lease...

Q: On January 1, 2017, Millay Inc. paid $700

On January 1, 2017, Millay Inc. paid $700,000 for 10,000 shares of Genso Company’s voting common stock, which was a 10% interest in Genso. At that date, the net assets of Genso totaled $6,000,000. The...

Q: Use the information for Rick Kleckner Corporation from BE21-3.

Use the information for Rick Kleckner Corporation from BE21-3. Assume that at December 31, 2017, Kleckner made an adjusting entry to accrue interest expense of $29,530 on the lease. Prepare Kleckner’s...

Q: Jana Kingston Corporation enters into a lease on January 1, 2017

Jana Kingston Corporation enters into a lease on January 1, 2017, that does not transfer ownership or contain a bargain-purchase option. It covers 3 years of the equipment’s 8-year useful life, and th...

Q: Assume that IBM leased equipment that was carried at a cost of

Assume that IBM leased equipment that was carried at a cost of $150,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1, 2017, with equal rental payments of $30,044 at...

Q: Use the information for IBM from BE21-6. Assume the

Use the information for IBM from BE21-6. Assume the direct-financing lease was recorded at a present value of $150,000. Prepare IBM’s December 31, 2017, entry to record interest. From BE21-6: Assume...

Q: Jennifer Brent Corporation owns equipment that cost $80,000 and

Jennifer Brent Corporation owns equipment that cost $80,000 and has a useful life of 8 years with no salvage value. On January 1, 2017, Jennifer Brent leases the equipment to Donna Havaci Inc. for 1 y...

Q: Refer to the accounting change by Wertz Construction Company in BE22-

Refer to the accounting change by Wertz Construction Company in BE22-1. Wertz has a profit-sharing plan, which pays all employees a bonus at year-end based on 1% of pretax income. Compute the indirect...

Q: Nancy Tercek, the financial vice president, and Margaret Lilly,

Nancy Tercek, the financial vice president, and Margaret Lilly, the controller, of Romine Manufacturing Company are reviewing the financial ratios of the company for the years 2017 and 2018. The finan...

Q: Use the information for Indiana Jones Corporation from BE21-9.

Use the information for Indiana Jones Corporation from BE21-9. Assume that for Lost Ark Company, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning c...