Question 4 [5 pts]

On Dec. 31, 2040, Tristar Aero Dynamics, Inc. (TAD) has issued a zero-coupon debt with a face value of $1,000and three years to maturity. The yield to maturity for the firms debt capital is 10%. Compute the price of the zero-coupon debt on Dec. 31, 2040. In addition, find interest expenses and the balance of the debt principal to be reported at the end of each year, 2041 through 2043. (Lecture notespp.20-24)

Answer (show the steps/calculation toward yourresults):

Question 5 [5 pts]

On Jan. 1, 2051, Salomon Sports signed a lease agreement to use an industrial equipment for the next three years. The equipment has a useful life of three years, and the straight-line depreciation method will be used. The lease is qualified for a financial lease and requires an annual lease payment of $40,211.48 at the end of each year from 2051 to 2053.With an applicable discount rate of 10%, the lease amortization schedule is as follows:

	Beg. balance (a)	Lease payment (b)	Interestexpense (c)	Lease amortized (d = b c)	Ending balance (a - d)
1	100,000.00	40,211.48	10,000.00	30,211.48	69,788.52
2	69,788.52	40,211.48	6,978.85	33,232.63	36,555.89
3	36,555.89	40,211.48	3,655.59	36,555.89	0

Using the template below, provide the relevant accounting entries on Jan. 1, 2051, and Dec. 31, 2051, respectively, showing the dollar amountsand whether they are an increase or decrease. (Lecture notespp.25-29)

Answer:

Jan. 1, 2051,Lease agreed.
Assets	Liabilities & Equity

Dec. 31, 2051,Lease payment.
Assets	Liabilities & Equity