28.On January 1, 2010, Gee Company issued a 2-year, 8%, $20,000 installment note payable. The payment on this note is $11,215 and is paid annually at year-end beginning December 31, 2009. When the note was issued, the market rate of interest was 8%. Complete the following amortization schedule.
Date
|
Cash
|
Interest Expense
|
Principal
|
Carrying Value
|
1/1/10
|
|
|
|
|
12/31/10
|
|
|
|
|
12/31/11
|
|
|
|
|
29.On January 1, 2009, Grant Company leased telephone equipment fromXu, Inc. Grant uses straight-line depreciation. The contract requires Grant to pay $5,000 each December 31 for the next three years, at which time the equipment is to be returned to Xu. Using an interest rate of 8%, the present value of the lease payments is $12,885. The following is Grant’s January 1, 2009, balance sheet before the lease agreement.
Current assets
|
|
$20,000
|
Equipment
|
$25,000
|
|
Accumulated depreciation
|
(3,000)
|
22,000
|
Total assets
|
|
$42,000
|
|
|
|
Liabilities
|
|
$20,000
|
Shareholders' equity
|
|
22,000
|
Total liabilities and shareholders' equity
|
|
$42,000
|
Calculate and compare Grant’s debt/equity ratios on January 1, 2009, immediately after the lease is signed, as an operating lease and a capital lease.
Use the table below to answer the problems 30 through 33.
Jan. 1, 2009
|
|
|
$36,021
|
Dec. 31, 2009
|
$2,400
|
3,602
|
1,202
|
37,223
|
Dec. 31, 2010
|
2,400
|
3,722
|
1,322
|
38,545
|
Dec. 31, 2011
|
2,400
|
3,855
|
1,455
|
40,000
|
|
|
|
|
|
30.What is the nature of the table presented? What is being amortized?
31.Were the bonds issued at a discount or premium? How do you know?