On January 1, 2021, a company signs a 25-year lease for land. Annual payments of $20,000 begin on December 31, 2021. The company's normal borrowing rate is 6%. For what amount would the company record the lease on January 1, 2021 (rounded to nearest whole dollar)? Use (PV of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors.)
A) $255,667.
B) $440,463.
C) $500,000.
D) $244,333.
Answer: A
On July 1, 2021, a company signs a 30-month lease for an office building. Lease payments of $6,457 are due every three months (10 payments total), beginning on October 1, 2021. The company's normal borrowing rate is 8% (2% every three months). For what amount would the company record the lease on July 1, 2021 (rounded to nearest whole dollar)? Use (PV of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors.)
A) $62,000.
B) $58,001.
C) $64,570.
D) $43,327.
Answer: B
Term bonds are:
A) Bonds issued below the face amount.
B) Bonds that mature in installments.
C) Bonds that mature all at once.
D) Bonds issued above the face amount.
Answer: C
