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  • Apr 4, 2011, 07:38 AM
    peaceful9321
    need help with this homework problem
    Griffin Inc has authorized 500,000 shares of 10%, $10 par value, cumulative preferred stock. There were 100,000 shares issued and outstanding at all times during 2010. The firm also has authorized 5 million shares of $1 common stock, with 4 million shares issued and outstanding.

    On January 2, 2010, Griffin Inc. acquired an asset, a piece of specialized heavy equipment for $8 million with a capital lease. The lease contract indicates that the term of the lease is eight years. Payments of $1.5 M are to be made each Dec 31. The lease payment was made December 31, 2010 and consisted of $1 million principal and $0.5 M of interest expense. The capital lease is depreciated using the straight-lime method over eight years with zero salvage value.

    Required:
    Assuming that the equip was acquired using a capital lease, identify and analyze the effect of the acquisition, depreciation, and lease payment.

    I need the required question answered, having trouble with it.
  • Apr 4, 2011, 07:52 AM
    JudyKayTee

    AMHD does not do homework. "We" ask that you post your answer and then someone will come along with an opinion.

    You have no idea where to start with this?

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