Attached is my assignment. Can anyone help?

ASSIGNMENTChapter 21 - Intermediate Accounting Question 1 On December 31, 2010, Harris Co. leased a machine from Catt, Inc. for a fiveyear period. Equal annual payments under the lease are $630,000 (including $30,000 annual executory costs) and are due on December 31 of each year. The first payment was made on December 31, 2010, and the second payment was made on December 31, 2011. The five lease payments are discounted at 10% over the lease term. The present value of minimum lease payments at the inception of the lease and before the first annual payment was $2,502,000. The lease is appropriately accounted for as a capital lease by Harris. In its December 31, 2011 balance sheet, Harris should report a lease liability of $1,902,000. $1,872,000. $1,711,800. $1,492,200. Question 2 Pisa, Inc. leased equipment from Tower Company under a fouryear lease requiring equal annual payments of $86,038, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4year useful life and no salvage value. Pisa, Inc.'s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Assuming that this lease is properly classified as a capital lease, what is the amount of interest expense recorded by Pisa, Inc. in the first year of the asset's life? PV Annuity Due PV Ordinary Annuity 8%, 4 periods 3.57710 3.31213 10%, 4 periods 3.48685 3.16986 $0 $24,621 $17,738 $22,798 Question 3 Mays Company has a machine with a cost of $400,000 which also is its fair market value on the date the machine is leased to Park Company. The lease is for 6 years and the machine is estimated to have an unguaranteed residual value of $40,000. If the lessor's interest rate implicit in the lease is 12%, the six beginningoftheyear lease payments would be $82,465. $78,180. $66,667. $92,361. Question 4 On December 31, 2011, Kuhn Corporation leased a plane from Bell Company for an eightyear period expiring December 30, 2019. Equal annual payments of $150,000 are due on December 31 of each year, beginning with December 31, 2011. The lease is properly classified as a capital lease on Kuhn's books. The present value at December 31, 2011 of the eight lease payments over the lease term discounted at 10% is $880,264. Assuming the first payment is made on time, the amount that should be reported by Kuhn Corporation as the lease liability on its December 31, 2011 balance sheet is $792,238. $730,264. $880,264. $818,290. Question 5 Metro Company, a dealer in machinery and equipment, leased equipment to Sands, Inc., on July 1, 2011. The lease is appropriately accounted for as a sale by Metro and as a purchase by Sands. The lease is for a 10year period (the useful life of the asset) expiring June 30, 2021. The first of 10 equal annual payments of $621,000 was made on July 1, 2011. Metro had purchased the equipment for $3,900,000 on January 1, 2011, and established a list selling price of $5,400,000 on the equipment. Assume that the present value at July 1, 2011, of the rent payments over the lease term discounted at 8% (the appropriate interest rate) was $4,500,000. What is the amount of profit on the sale and the amount of interest income that Metro should record for the year ended December 31, 2011? $0 and $155,160 $900,000 and $360,000 $600,000 and $155,160 $600,000 and $180,000 Question 6 Pye Company leased equipment to the Polan Company on July 1, 2011, for a tenyear period expiring June 30, 2021. Equal annual payments under the lease are $80,000 and are due on July 1 of each year. The first payment was made on July 1, 2011. The rate of interest contemplated by Pye and Polan is 9%. The cash selling price of the equipment is $560,000 and the cost of the equipment on Pye's accounting records was $496,000. Assuming that the lease is appropriately recorded as a sale for accounting purposes by Eby, what is the amount of profit on the sale and the interest revenue that Pye would record for the year ended December 31, 2011? $64,000 and $50,400 $64,000 and $43,200 $64,000 and $21,600 $0 and $0 Question 7 Gage Co. purchases land and constructs a service station and car wash for a total of $360,000. At January 2, 2010, when construction is completed, the facility and land on which it was constructed are sold to a major oil company for $400,000 and immediately leased from the oil company by Gage. Fair value of the land at time of the sale was $40,000. The lease is a 10 year, noncancelable lease. Gage uses straightline depreciation for its other various business holdings. The economic life of the facility is 15 years with zero salvage value. Title to the facility and land will pass to Gage at termination of the lease. A partial amortization schedule for this lease is as follows: Payments Interest Amortization Balance $400,000.00 Dec. 31, 2010 $65,098.13 $40,000.00 $25,098.13 374,901.87 Dec. 31, 2011 65,098.13 37,490.19 27,607.94 347,293.93 Dec. 31, 2012 65,098.13 34,729.39 30,368.74 316,925.19 Jan. 2, 2010 The total leaserelated expenses recognized by the lessee during 2011 is which of the following? (Rounded to the nearest dollar.) $65,098 $64,000 $73,490 $61,490 Question 8 On December 31, 2011, Lang Corporation leased a ship from Fort Company for an eightyear period expiring December 30, 2019. Equal annual payments of $200,000 are due on December 31 of each year, beginning with December 31, 2011. The lease is properly classified as a capital lease on Lang 's books. The present value at December 31, 2011 of the eight lease payments over the lease term discounted at 10% is $1,173,685. Assuming all payments are made on time, the amount that should be reported by Lang Corporation as the total obligation under capital leases on its December 31, 2012 balance sheet is $871,054. $1,200,000. $1,091,054. $1,000,159. Question 9 Geary Co. leased a machine to Dains Co. Assume the lease payments were made on the basis that the residual value was guaranteed and Geary gets to recognize all the profits, and at the end of the lease term, before the lessee transfers the asset to the lessor, the leased asset and obligation accounts have the following balances: Leased equipment under capital lease $400,000 Less accumulated depreciationcapital lease 384,000 $16,000 Interest payable $1,520 Obligations under capital leases 14,480 $16,000 If, at the end of the lease, the fair market value of the residual value is $8,800, what gain or loss should Geary record? $7,200 loss $7,120 loss $6,480 gain $8,800 gain Question 10 Hull Co. leased equipment to Riggs Company on May 1, 2011. At that time the collectibility of the minimum lease payments was not reasonably predictable. The lease expires on May 1, 2012. Riggs could have bought the equipment from Hull for $3,200,000 instead of leasing it. Hull's accounting records showed a book value for the equipment on May 1, 2008, of $2,800,000. Hull's depreciation on the equipment in 2011 was $360,000. During 2011, Riggs paid $720,000 in rentals to Hull for the 8month period. Hull incurred maintenance and other related costs under the terms of the lease of $64,000 in 2011. After the lease with Riggs expires, Hull will lease the equipment to another company for two years. The income before income taxes derived by Hull from this lease for the year ended December 31, 2011, should be $296,000. $360,000. $656,000. $720,000