accounting homework 77 - CA Essay Writers

“Lease it or Buy it?”

Assume you are the controller of a company with operations throughout North America and the company is considering the acquisition of an aircraft for use by executives. You convince the executive team it is more cost efficient to enter into a long term lease of the aircraft instead of borrowing the money to purchase the aircraft. The team wants to understand the impact of the lease on the financial statements. Describe the accounting for the lease and the financial statement presentation of the lease.

Brief Exercise 16-02

On August 1, Ivanhoe Company buys 1,000 shares of Estrada common stock for $26,500 cash. On December 1, Ivanhoe sells the stock investments for $29,500 in cash.

Journalize the purchase and sale of the common stock. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit

Brief Exercise 16-06

In its first year of operations, Wildhorse Corporation purchased, as a long-term investment, available-for-sale debt securities costing $65,000. At December 31, 2020, the fair value of the securities is $60,500.

Prepare the adjusting entry to record the securities at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31

Brief Exercise 16-08

Pharoah Corporation has the following long-term investments. (1) Common stock of Eidman Co. (10% ownership), cost $102,500, fair value $109,500. (2) Common stock of Pickerill Inc. (30% ownership), cost $202,500, equity $252,500. (3) Debt investment, cost $92,500, fair value $152,500.

Prepare the investments section of the balance sheet.

Pharoah Corporation Balance Sheet

			$


			$

Exercise 16-03 (Video)

Pharoah Company purchased 70 Rinehart Company 9%, 10-year, $1,690 bonds on January 1, 2020, for $118,300. The bonds pay interest annually on January 1. On January 1, 2021, after receipt of interest, Pharoah Company sold 40 of the bonds for $65,065.

Prepare the journal entries to record the transactions described above. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date

Account Titles and Explanation

Debit

Credit

(To record receipt of interest)

(To record sale of bonds)

Exercise 16-07 a-b (Part Level Submission) (Video)

On January 1, Carla Vista Corporation purchased a 25% equity in Helbert Corporation for $164,500. At December 31, Helbert declared and paid a $57,900 cash dividend and reported net income of $168,500.

(a)

Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit




	(To record dividends received)


	(To record equity in Helbert Corporation’s net income)

(b)

Determine the amount to be reported as an investment in Helbert stock at December 31.

Investment in Helbert, December 31