On 12/31/20 Josh leased computer equipment from Ryan with a 4 year lease. Lease Payments of $10,000 are due on 12/31 and start on 12/31/2020. Josh used 3% interest rate to account for the lease. The useful life of the equipment is 8 years. Assume the fair value is $45,000. Both companies have a 12/31 year end.  THIS IN AN OPERATING LEASE.

1. Record the journal entries for Ryan for 2020 and 2021.

2. Show the lease on Ryan B/S AND I/S for 2021.

On January 1, 2020, the balance in Todd Co's "Prepaid Insurance" account was $3,600. At the December 31 year end, the balance was $1,200. In Todd's Cash Flow Statement for the year ended 12/31/2020, the net $2,400 net decrease will be
A Subtracted from Net Income in determining net cash provided by operating activities
B Reported as a cash inflow from financing activities
C Reported as a cash outflow from financing activities
D Added to Net Income in determining net cash provided by operating activities

Rose is a single mother (whose child lives with her all year round and is her dependent). She files her tax return as Head of Household. Her 2020 income from wages is $475,650. She has “net long-term capital gains” of $85,000. Total 2020 gross income is $560,650. Rose is under 65 years of age and does not itemize her deductions. What is Rose's total federal income tax? Show work.

A) $112,829

B) $123,344.

C) $138,644

D) $149,701     

ABC Company formed in 2020. ABC company files their tax return using the accrual basis of accounting. ABC’s profit and loss showed the following:

Revenue - $1,000,000

Expenses:

Salaries - $700,000

Office Expense - $50,000

Supplies - $20,000

Postage - $10,000

Meals - $7,000

Entertainment - $1,000

Repairs - $2,000

Rent - $50,000

Political Contributions - $2,500

Calculate ABC company’s taxable income using the accounts above. Assuming ABC company operates a sole proprietorship, calculate the Qualified Business Income Deduction for 2020.

Zapzap Corporation issued $4,000,000 in five-year, 4% bonds on August 1, 2019. Interest is to be paid semi-annually on Feb 1 and August 1. The bonds were sold to yield 6% effective annual interest. Pine Corporation has a calendar year-end and follows IFRS. Instructions: Prepare the entries required for these bonds at • December 31, 2019(year end) • February 1, 2020 • August 1, 2020 when the interest was paid, and the entire issue was retired early for $4,350,000 plus interest.

On January 1, 2020, the balance in Tim Company's "Accounts Payable" account was $22,000. At the December 31 year end, the balance was $30,000. In Tim's Cash Flow Statement for the year ended 12/31/2020, the $8,000 net increase will be
A Subtracted from Net Income in determining net cash provided by operating activities
B Reported as a cash outflow from financing activities
C Reported as a cash inflow from investing activities
D Added to Net Income in determining net cash provided by operating activities

JenBritt Incorporated had a free cash flow (FCF) of $92 million in 2019. The firm projects FCF of $220 million in 2020 and $560 million in 2021. FCF is expected to grow at a constant rate of 6% in 2022 and thereafter. The weighted average cost of capital is 8%. What is the current (i.e., beginning of 2020) value of operations? Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to two decimal places.

On July 1, 2020, Katerina made a $90,000 interest-free loan to her son, Dominic, who used the money to retire a mortgage on his personal residence and to buy a certificate of deposit. Dominic’s only income for the year is his salary of $35,000 and $1,400 interest income on the certificate of deposit. Assume the relevant Federal interest rate is 8% compounded semiannually.

Required: Determine the effect of the loan on Katerina’s gross income for 2020. Provide explanations and supporting computations to support your answer to receive full credit.