Question

Lassonde Industries Inc. develops, manufactures and markets a wide range of fruit and vegetable juices and drinks as well as specialty food products, such as fondue broths and sauces, soups, sauces and gravies, pestos, and sauces for pasta and pizza. It also produces apple cider and wine-based beverages.
The company’s long- term debt includes the following obligations:
Required:
1. Assume that the equipment related to the first obligation was acquired on January 1, 2010, and that the first payment of $ 262,212 was made on December 31, 2010. Verify that the carrying amount reported by the company as at December 31, 2012, represents the present value of the remaining annual payments. (Tables 10C. 1 and 10C. 2 in Chapter 10 do not include the 5.5 percent interest rate. Use Microsoft Excel or a calculator to compute the present value of future payments.)
2. How much interest will the company pay as part of the five remaining instalments on the 5.5 percent obligation?
3. Prepare the journal entry to record payment of the instalment on December 31, 2013.
4. Assume that the obligation under the finance lease was signed on June 1, 2011, and that the first semi- annual instalment was made on November 30, 2011. Verify that the carrying amount reported by the company as at December 31, 2012, represents the present value of the remaining semi- annual payments. Use a calculator or Microsoft Excel to compute the present value of future payments.


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  • CreatedAugust 04, 2015
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