Question

would you be able to help me figure out 14.27 and 14.28

December 31, 2021, through the final Huld make to rec 14-27 Liabilities from leasing Log DES: a. $32,673; C. $2,941 interest expense Exercise 14-27 CHECK FIGURES: on January 1 2020, a day when the available interest rate was 9. Valcent Products Inc. leased equipment life. The contract called for an $8,400 annual lease payment at the end of each of the next the equipment becoming the property of the lessee at the end of that period. December 31, 2020 with an eight-year life five years, with the cheet (assets, Keywired 1. Prepare entries to record the leasing of the equipment, b. depreciation expense for c. the December 31, 2 liability on December 31, 2021. An amortization schedule for the lease liability. sation expense for 2021 assuming straight-line and a zero residual value. December 31, 2021, lease payment, including the recoenition of interest expense on the lease Exercise 14-28 Calculate debt to equity ratio LO10 for Solar Industries and its related but separate financing company Solar Financing Corp, calculate the debt in equity ratio for 2019 and 2020. Explain why there are such significant differences in the ratios. ssuming LOS Solar Industries in millions) Solar Financing Corp (in millions) 2020 2019 2020 2019 t note. - 31 of Total Debt (A).......... Total Equity (B) 42,850 20,502 36,700 23,955 88,760 8,470 76.452 7.454

Answer 1

14-28
Debt to Equity ratio = Total Debt / Total Equity

Solar Industries
2020 = $42850/20502 = 2.09
2019 = $36700/23955 = 1.53

Solar Financing Corp
2020 = $88760/8470 = 10.48
2019 = $76452/7454 = 10.26

There is significant differences in ratio of two companies, since Solar Financing Corp uses higher proportion of debt for financing. Whereas other company uses lower proportion of debt

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