8 Review Later Company Inc. enters into a 10-year finance lease at the beginning of 2021 for a total of $250,000. The annual lease payment is $25,000 (payable at the end of each year) and the rate implicit in the lease is 5%. No initial direct costs are incurred. How much interest expense should be recognized in 2021? $8,034 $9,930 $9,652 $8,871 12 Review Later Company Co. has 1,000 employees and it decides to grant each of the employees 200 share options as part of its new rewards plan. The options are exercisable over 5 years and subject only to the condition that the company's stock price must be at least 30% higher than its original issue price. Company Co.'s share-based payments are subject to: Service and market performance conditions Non-market performance conditions Non-vesting condition O Service condition 13 Review Later Company A has 800 employees, and it decides to grant each of the employees 50 share options as part of its new rewards plan. The options are exercisable over 5 years and subject to a 3-year service condition. The fair value of each option at the grant date is $16. The company estimates that 80% of its employees will meet the service condition required for receiving the options. Calculate the total share-based payment expense for Company A assuming that 80% of the employees actually meet the service condition. $853,333 $341,333 $512,000 $170,667 14 Review Later Which of the following is not a required criterion for a transaction to be considered a business combination? Presence of a substantive process Presence of outputs Presence of inputs Less than 90% of the value acquired is in a single asset of group of similar assets Which of the following statements regarding the accounting for business combinations is false? Goodwill is the difference between the consideration transferred by the acquirer to the acquiree and the fair value of identifiable assets acquired. Under the acquisition method, the identifiable assets acquired during a business combination are measured at their acquisition-date fair values. The identifiable assets acquired, liabilities assumed, and noncontrolling interest in the acquiree are recognized separately from the goodwill arising out of a business combination. The acquirer in a business combination will only recognize the liabilities assumed if they meet the definition of liabilities and are part of the business combination transaction. 16 Review Later Debt issuance costs are: Recognized initially as a current liability on the balance sheet Expensed on the income statement when the transaction occurs O a Accounted for as a deduction from the equity balance on the balance sheet Amortized over the term of the related debt liability