Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Digltal Telephony issued 10% bonds, dated January 1 , with a face amount of $32 million on January 1, 2021. The bonds mature In 2031
Digltal Telephony issued 10% bonds, dated January 1 , with a face amount of $32 million on January 1, 2021. The bonds mature In 2031 (10 years). For bonds of similar risk and maturity the market yleld is 12%. Interest is pald semlannually on June 30 and December 31. Digltal recorded the Issue as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and (Use approprlate factor(s) from the tables provided.) Digital also leased switching equipment to Midsouth Communications, Inc. on September 30, 2021. Digital purchased the equipment from MDS Corp. at a cost of $6 million. The five-year lease agreement calls for Midsouth to make quarterly lease payments of $391,548, payable each September 30. December 31, March 31, and June 30, with the first payment on September 30, 2021. Digltal's implicit Interest rate is 12% Required: 1. What would be the amountis) related to the bonds that Digltal would report in its statement of cash flows for the year ended December 31,2021 , under the direct method? 2 What would be the amounts related to the lease that Milsouth would report in its statement of cash flows for the year ended December 31,2021 , under the direct method? 3. What would be the amounts related to the lease that Drgital would report in its statement of cash flows for the year ended December 31, 2021, under the direct method? 4. Assume MDS manufactured the equipment at a cost of $5 million and that Misouth leased the equlpment 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 31 , 2021? Complete this question by entering your answers in the tabs below. What would be the amount(s) related to the bonds that Digital would report in its statement of cash flows for the year ended December 31, 2021, under the direct method? (Do not round intermediate calculations. Enter your answers in whole dollars. List cash outflows as negative amounts.) Complete this question by entering your answers in the tabs below. What would be the amounts related to the lease that Midsouth would report in its statement of cash flows for the year ended December 31, 2021, under the direct method? (Do not round intermediate calculations. Enter your answers in whole dollars. List cash outflows as negative amounts.) Complete this question by entering your answers in the tabs below. What would be the amounts related to the lease that Digital would report in its statement of cash flows for the year ended December 31, 2021, under the direct method? (Do not round intermediate calculations. Enter your answers in whole dollars. List cash outflows as negative amounts.) Complete this question by entering your answers in the tabs below. Assume MDS manufactured the equipment at a cost of 55 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 31, 2021? (Do not round intermediate calculations. Enter your answers in whole dollars. List cash outflows as negative amounts.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started