Question
In: Accounting
Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the...
Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the purchase call for Right Now to take delivery of the equipment on June 1 , 2016 upon transfer of $50,000 to ARCSOFT on that same day. Additional payments of $200,000 is to be paid by Right Now to ARCSOFT on June 1, 2017 and June 1, 2018. The equipment will be usable upon delivery with no further involvement by ARCSOFT. Both companies only make adjusting entries at the end of the year. The normal borrowing rate for Right Now is 8%.
What journal entries should Right Now and ARCSOFT make on:
June 1, 2016
Dec 31, 2016
Dec 31, 2017
June 1, 2018
Solutions
Expert Solution
| Right Now.Inc | |||
| Date | Account Title | Debit | Credit |
| JUNE 1,2016 | ARCSOFT Account | $ 50,000.00 | |
| JUNE 1,2016 | Bank | $ 50,000.00 | |
| Dec 31,2016 | Rent Expense | $ 4,000.00 | |
| Dec 31,2016 | Lease liability (accrete interest) | $ 4,000.00 | |
| Dec 31,2017 | Rent Expense | $ 20,000.00 | |
| Dec 31,2017 | Lease liability (accrete interest) | $ 20,000.00 | |
| June 1,2018 | ARCSOFT Account | $ 200,000.00 | |
| June 1,2018 | ARCSOFT Account Payables | $ 200,000.00 |
| ARCSOFT | |||
| Date | Account Title | Debit | Credit |
| JUNE 1,2016 | Bank | $ 50,000.00 | |
| JUNE 1,2016 | Right Now,Inc | $ 50,000.00 | |
| Dec 31,2016 | Lease income Receivables | $ 4,000.00 | |
| Dec 31,2016 | Rental income | $ 4,000.00 | |
| Dec 31,2017 | Lease income Receivables | $ 20,000.00 | |
| Dec 31,2017 | Rental income | $ 20,000.00 | |
| June 1,2018 | Right Now,Inc -Receivables | $ 200,000.00 | |
| June 1,2018 | Right Now,Inc | $ 200,000.00 |
it is wrong answser .Sorry
ekkarill92 answered 2 years agoRelated Solutions
Right Now, Inc. purchases a large piece of equipment from ARCSOFT Corp. The terms of the...
Right Now, Inc. purchases a large piece of equipment from
ARCSOFT Corp. The terms of the purchase call for Right Now to take
delivery of the equipment on June 1 , 2016 upon transfer of $50,000
to ARCSOFT on that same day. Additional payments of $200,000 is to
be paid by Right Now to ARCSOFT on June 1, 2017 and June 1, 2018.
The equipment will be usable upon delivery with no further
involvement by ARCSOFT. Both companies only make...
Highlight Company purchases the right to use a piece of music from the original musician who...
Highlight Company purchases the right to use a piece of music
from the original musician who created it. Officials hope to make
this music the company’s “signature song.” Therefore, the contract
(which is signed on January 1, Year One) is for four years. The
agreed upon price is $800,000, with no stated interest rate to be
paid. Highlight could borrow this amount of money at a 5 percent
annual interest rate at the current time. The arrangement states
that Highlight...
Clyde Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Clyde Corp. is considering the purchase of a new piece of
equipment. The cost savings from the equipment would result in an
annual increase in cash flow of $101,100. The equipment will have
an initial cost of $601,100 and have an 8 year life. The equipment
has no salvage value. The hurdle rate is 8%. Ignore income taxes.
(Future Value of $1, Present Value of $1, Future Value
Annuity of $1, Present Value Annuity of $1.) (Use
appropriate factor from...
Briar Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Briar Corp. is considering the purchase of a new piece of
equipment. The cost savings from the equipment would result in an
annual increase in cash flow of $217,000. The equipment will have
an initial cost of $1,217,000 and have an 8-year life. The salvage
value of the equipment is estimated to be $217,000. The hurdle rate
is 6%. Ignore income taxes. (Future Value of $1, Present
Value of $1, Future Value Annuity of $1, Present Value Annuity of
$1.)...
Grove Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Grove Corp. is considering the purchase of a new piece of
equipment. The cost savings from the equipment would result in an
annual increase in net income of $200,300. The equipment will have
an initial cost of $1,200,300 and have an 8 year life. The salvage
value of the equipment is estimated to be $200,300. The hurdle rate
is 12%. Ignore income taxes. (Future Value of $1, Present Value of
$1, Future Value Annuity of $1, Present Value Annuity of...
Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Wilson Corp. is considering the purchase of a new piece of
equipment. The cost savings from the equipment would result in an
annual increase in net income after tax of $50,000. The equipment
will have an initial cost of $626,000 and have an 8 year life. The
salvage value of the equipment is estimated to be $114,000. If the
hurdle rate is 11%, what is the approximate net present value?
can you please explain everything step by step as to...
Briar Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Briar Corp. is considering the purchase of a new piece of
equipment. The cost savings from the equipment would result in an
annual increase in cash flow of $208,000. The equipment will have
an initial cost of $1,208,000 and have an 8 year life. The salvage
value of the equipment is estimated to be $208,000. The hurdle rate
is 6%. Ignore income taxes. (Future Value of $1, Present Value of
$1, Future Value Annuity of $1, Present Value Annuity of...
Rauch Inc. leases a piece of equipment to Donahue Corp. on Jan 1 2017. The lease...
Rauch Inc. leases a piece of equipment to Donahue Corp. on Jan 1
2017. The lease agreement called for annual rental payments of
$4892 at the beginning of each year of the 4 year lease. The
equipment has an economic useful life of 6years, a fair value of
$25,000, a book value of $20,000, and both parties expect a
residual value of $8,250 at the end of the lease term, though this
amount is not guaranteed. Rauch set the lease...
TA, Inc. is considering replacing a piece of old equipment with a piece of new equipment....
TA, Inc. is considering replacing a piece of old equipment with
a piece of new equipment. Details for both are given below:
Old Equipment
New Equipment
Current book value
$1,500,000
Current market value
$2,500,000
Acquisition cost
$6,200,000
Remaining life
10 years
Life
10 years
Annual sales
$350,000
Annual sales
$850,000
Cash operating expenses
$140,000
Cash operating expenses
$500,000
Annual depreciation
$150,000
Annual depreciation
$620,000
Accounting salvage value
$0
Accounting salvage value
$0
Expected salvage value after 10 years
$240,000
Expected...
TA, Inc. is considering replacing a piece of old equipment with a piece of new equipment....
TA, Inc. is considering replacing a piece of old equipment with
a piece of new equipment. Details for both are given below:
Old Equipment
New Equipment
Current book value
$1,800,000
Current market value
$2,500,000
Acquisition cost
$6,200,000
Remaining life
10 years
Life
10 years
Annual sales
$350,000
Annual sales
$850,000
Cash operating expenses
$140,000
Cash operating expenses
$500,000
Annual depreciation
$180,000
Annual depreciation
$620,000
Accounting salvage value
$0
Accounting salvage value
$0
Expected salvage value
$240,000
Expected salvage value
$750,000...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- sara is a 50-year-old woman who lives in a poor village in india. unfortunately, sara’s health...
- What is your opinion on the use of AI technology? Is it necessary or is it...
- For this problem, carry at least four digits after the decimal in your calculations. Answers may...
- Why is it okay to speculate on Currency?
- What is the budgeting cycle and master budget? Why should companies use a master budget?
- please i need to have good answers and easy to understand This exercise refers to the...
- (1 point) Find y as a function of t if y′′+25y=0, y(0)=4,y′(0)=6. y= ?
ADVERTISEMENT