Carla Vista Corporation is a lessee with a finance lease. The asset is recorded at $1040000 and has an economic life of 8 years.
The lease term is 5 years. The asset is expected to have a fair value of $370000 at the end of 5 years, and a fair value of $135000 at the end of 8 years. The lease agreement provides for the transfer of title of the asset to the lessee at the end of the lease term. What amount of amortization expense would the lessee record for the first year of the lease
The amount of amortization expense the lessee would record for the first year of the lease is $131,125.
Explanation:
Since the lease agreement provides for the transfer of title of the asset to the lessee at the end of the lease term, this implies that the calculation of the amount of amortization expense the lessee would record will be based on the economic life of the asset. Therefore, we have:
First year amortization expense = (Amount at which the asset is recorded - Fair value at the end of 8 years) / Economic life of the asset = ($1,040,000 - $135,000) / 8 = $131,125
the down payment = cost of the house - mortgage = $550,000 - $300,000 = $250,000
Something is not right with this question, because if you have been able to save $250,000 in 5 years, it means that you saved around $50,000 a year. If you were able to save that much money per year, then you should be able to pay a higher mortgage. The average 30 year mortgage has an APR of a little over 4% (national average between 4.04% - 4.16%). That would result in a monthly payment of around $1,151 including insurance.
So you should either go to another bank (if your salary is really that high) or search a cheaper house.
treatment of hazardous waste is preferred to the other options, in a sense they all have side effect. But if waste are treated it reduces the rate of pollution.
The wage payment system is divided into three major types:
Time rate: employees are paid on the basis of time, e.g. per hour, day or week. This payment system doesn't consider any type productivity factors. The main advantage of using this payment system is its simplicity: e.g. amount of hour worked x wage per hour = total salary.
Piece rate: employees are paid on the basis of quantity and quality of work performed (productivity).
Incentive wage: combination of the two prior systems, where employees are paid a fixed time rate plus a bonus or incentive pay depending on productivity.
