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Mgmt_200_Spring_2008_solutions_3-24-08(3,26) - does require...

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Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for March 24, 2008 E9–8. This arrangement does not create an immediate liability. Carnival has entered into an operating lease, which requires the recording of a lease expense and a lease payable with the passage of time. Ten years is not 75% of the useful life of an office building, so Carnival has not entered into a capital lease arrangement, which
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Unformatted text preview: does require an asset and a liability being recorded on the balance sheet. E9–14. 1 $50,000 x 0.7513 = $37,565 2 $10,000 x 2.4869 = $24,869 It is better to pay in three installments because the economic cost is less. 3 $40,000 x 0.5132 = $20,528 4 $15,000 x 6.1446 = $92,169 E9–21. $25,000 x 3.3522 = $83,805 (purchase price)...
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