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Digital Telephony issued 1 2 % bonds, dated January 1 , with a face amount of $ 4 5 million on January 1 , 2
Digital Telephony issued bonds, dated January with a face amount of $ million on January The bonds mature in years For bonds of similar risk and maturity the market yield is Interest is paid semiannually on June and December Digital recorded the issue as follows:
Note: Use appropriate factors from the tables provided. FV of $ PV of $ FVA of $ PVA of $ FVAD of $ and PVAD of $
General Journal Debit Credit
Cash
Discount on bonds
Bonds payable
Digital also leased switching equipment to Midsouth Communications, Incorporated on September Digital purchased the equipment from MDS Corporation at a cost of $ million. The fiveyear lease agreement calls for Midsouth to make quarterly lease payments of $ payable each September December March and June with the first payment on September Digital's implicit interest rate is
Required:
What would be the amounts related to the bonds that Digital would report in its statement of cash flows for the year ended December under the direct method?
What would be the amounts related to the lease that Midsouth would report in its statement of cash flows for the year ended December under the direct method?
What would be the amounts related to the lease that Digital would report in its statement of cash flows for the year ended December under the direct method?
Assume MDS manufactured the equipment at a cost of $ million and that Midsouth leased the equipment directly from MDS What would be the amounts related to the lease that MDS would report in its statement of cash flows for the year ended December
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