Please answer the 8 questions in the attachment, and also please includes every steps of solving these questions. Thanks
Q1. In an operating lease in which the asset's economic life and lease term are different: The lessee depreciates the asset over its economic life. The lessee should record a leased asset and a related obligation at the present value of the lease payments. The lessee depreciates the leased asset over the term of the lease. The lessor depreciates the leased asset over its economic life. Q2. The long-term liability section of Premier Digital Corporation's balance sheet as of December 31, 2011, included 12% bonds having a face amount of $200,000 and a remaining discount of $13,030. Disclosure notes indicate the bonds were issued to yield 14%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2012, Premier Digital retired the bonds at 103 before their scheduled maturity. What is the amount of gain (loss) on early extinguishment of bonds? $(19,030) $19,030 $(17,942) $17,942 Q3. On January 1, 2012, Z Corporation issued 800 of its 8%, $1,000 bonds at 96. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2022. Z Corporation paid $40,000 in bond issue costs. Z Corporation uses the straight-line amortization method. What is the bond carrying value reported in the December 31, 2012, balance sheet? $771,200. $775,200. $807,200. $811,200. Q4. Bay Industries purchased a supply of electronic components from Elite Corporation on November 1, 2012. In payment for the $10 million purchase, ABC issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 24%. What is the amount of interest expense that Bay will report in its income statement for the year ended December 31, 2012? $400,000. $385,088. $312,715. $245,645. Q5. On January 1, 2012, Lindsay Corporation acquired some office equipment with a fair value of $145,871 by issuing a one-year, $150,000 note. The stated interest on the note is 6%. What is the amount of interest expense recognized for the year ended December 31, 2012? $7,200. $9,000. $11,564 $13,128. Q6. A major change you will find in the exposure draft about leases would be: Unlike current rule, lessee does not have to capitalize the asset it leases. Unlike current rule, lessee does not have an option to classify the lease as an operating lease. Unlike current rule, lessor does not have an option to classify the lease as an operating lease. Unlike current rule, lessor has to record as a sale of asset under any circumstances. Q7. On January 1, 2012, Victory International issued $10 million of 9%, 10-year convertible bonds at 102. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 50 shares of Victory's no par common stock. Bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 98. Victory applies International Financial Reporting Standards. Upon issuance, Victory should: Credit bonds payable at $10,200,000. Credit premium on bonds payable at $200,000. Credit equity $200,000. Credit bonds payable $9,800,000 Q8. On January 1, 2012, Benton Corp. issued $400,000 maturity value, 10% bonds for $354,118 cash. The bonds are dated December 31, 2011, and mature on December 31, 2021. Interest will be paid semiannually on June 30 and December 31. What amount of accrued interest payable should Benton report in its October 31, 2012, balance sheet? $13,333. $14,880. $18,775. $20,000
