Scribd Logo
Upload

Welcome to Scribd!

  • Midterm Solution

    Uploaded by

    xialeemarklingasalazar
    3 views2 pages
    The document discusses calculating the present value of a lease liability using an annuity formula with fixed payments of 220,000 over 4 years and a discount rate of 10%. It also discusses calculating the issue price of bonds including accrued interest from the last payment date to the issue date. Another topic is determining whether a contingent liability should be recorded based on the probability of the obligation occurring.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses calculating the present value of a lease liability using an annuity formula with fixed payments of 220,000 over 4 years and a discount rate of 10%. It also discusses calculating the issue price of bonds including accrued interest from the last payment date to the issue date. Another topic is determining whether a contingent liability should be recorded based on the probability of the obligation occurring.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views2 pages

    Midterm Solution

    Uploaded by

    xialeemarklingasalazar
    The document discusses calculating the present value of a lease liability using an annuity formula with fixed payments of 220,000 over 4 years and a discount rate of 10%. It also discusses calculating the issue price of bonds including accrued interest from the last payment date to the issue date. Another topic is determining whether a contingent liability should be recorded based on the probability of the obligation occurring.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    19.

    Solution:

    Fixed payments 220,000

    Multiply by: PV of an ordinary annuity of ₱1 @10%, n=4 3.16987

    Lease liability 697,371

    3.

    4,000,000 – the cash price equivalent

    9.

    Issue price pertaining to bonds only 962,563

    Sold accrued interest (1M x 12% x 3/12) 30,000

    Total issue price or cash proceeds 992,563

    Only the accrued interest from July to Sept. is added to the issue price of the bonds because the last
    interest payment date was on July 1

    21.

    Solution:

    Fixed payments 220,000

    Multiply by: PV of an ordinary annuity of ₱1 @10%, n=4 3.16987

    Lease liability 697,371

    23.

    Solution:

    Fixed payments 220,000

    Multiply by: PV of an ordinary annuity of ₱1 @10%, n=4 3.16987

    Net investment 697,371


    2.

    4,000,000 – the cash price equivalent

    22.

    17.

    the obligation is not probable, i.e., only 40% chance

    18.

    the obligation is not probable, i.e., only 40% chance

    25.

    8.

    (4,000,000 x 106.2695%) = 4,250,780

    7.

    You might also like