write my assignment 28816

1. At the beginning of 2011, VHF Industries acquired a machine with a fair value of $4,963,913 by signing a four-year lease. The lease is payable in four annual payments of $1.6 million at the end of each year. (Use Table 4)Required: (1) What is the effective rate of interest implicit in the agreement? (Round “PV Factor” to 5 decimal places. Round your answer to the nearest whole percent. Omit the “%” sign in your response.)(2) Prepare the lessee’s journal entry at the inception of the lease. (Enter your answers in dollars not in millions. Omit the “$” sign in your response.)General Journal Debit Credit ——————————————————————————–(3) Prepare the journal entry to record the first lease payment at December 31, 2011. (Enter your answers in dollars not in millions. Round “PV Factor” to 5 decimal places. Round your answers to the nearest dollar amount. Omit the “$” sign in your response.)General Journal Debit Credit ——————————————————————————–(4) Prepare the journal entry to record the second lease payment at December 31, 2012. (Enter your answers in dollars not in millions. Round “PV Factor” to 5 decimal places and final answers to the nearest dollar amount. Omit the “$” sign in your response.)General Journal Debit Credit ——————————————————————————–(5) Suppose the fair value of the machine and the lessor’s implicit rate were unknown at the time of the lease, but that the lessee’s incremental borrowing rate of interest for notes of similar risk was 10%. Prepare the lessee’s entry at the inception of the lease. (Enter your answers in dollars not in millions. Round PV factors to 5 decimal places and final answers to the nearest dollar amount. Omit the “$” sign in your response.)General Journal Debit Credit ——————————————————————————–2. On January 1, 2011, National Insulation Corporation (NIC) leased office space under a capital lease. Lease payments are made annually. Title does not transfer to the lessee and there is no bargain purchase option. Portions of the lessee’s lease amortization schedule appear below:Jan. 1 Payments Effective Interest Decrease in Balance Outstanding Balance ——————————————————————————– Required: (1) What is NIC’s lease liability at the inception of the lease (after the first payment)? (Omit the “$” sign in your response.) (2) What amount would NIC record as a leased asset? (Omit the “$” sign in your response.) (3) What is the lease term in years? (4) What is the asset’s residual value expected at the end of the lease term? (Omit the “$” sign in your response.) (5) How much of the residual value is guaranteed by the lessee? (Omit the “$” sign in your response.) (6) What is the effective annual interest rate? (Round your answer to the nearest whole percent. Omit the “%” sign in your response.) (7) What is the total amount of minimum lease payments? (Omit the “$” sign in your response.) (8) What is the total effective interest expense recorded over the term of the lease? (Omit the “$” sign in your response.)Check My WorkeBook Links (4)ReferencesWorksheet Learning Objective: 15-05 Describe and demonstrate how both the lessee and lessor account for a capital lease. Learning Objective: 15-08 Explain how lease accounting is affected by the residual value of a leased asset.