On January 1, 2021, Blossom Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Blossom to make annual payments of $170000 at the beginning of each year for 5 years with title passing to Blossom at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Blossom uses the straight-line method of depreciation for all of its fixed assets. Blossom accordingly accounts for this lease transaction as a finance lease. The lease payments were determined to have a present value of $708878 at an effective interest rate of 10%.In 2021, Blossom should record interest expense of $.

The interest expense is $53887.8

Explanation:

Given the annual payment made by Blossom in the beginning of the year is $17000.

The interest expense have to determined:

The present value of lease payment = $708878

The payment made on the beginning of year = $170000

Outstanding principal amount as on 31 december 2021, 708878 – 170000 = $538878

Given effective interest rate is 10%

Now calculate the interest expense.

answer; situational irony;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.