Accounting for capital lease, deferred tax, bond issuance

The long-term liabilities section of Dayton Inc.’s December 31, 2008, balance sheet included the
following:

a. A capital lease liability with 20 remaining lease payments of\$12,300 each, due annually on January 1:
Lease liability \$93,555
Less current portion 2,945
\$90,610
The incremental borrowing rate at the inception of the lease was 11.7% and the lessor’s implicit rate,
which was known by Dayton Inc., was 10.5%.

b. A deferred income tax liability due to a single temporary difference. The only difference between
Dayton Inc.’s taxable income and pretax accounting income is depreciation on a machine acquired on
January 1, 2008, for \$617,500. The machine’s estimated useful life is five years, with no salvage value.
Depreciation is computed using the straight-line method for financial reporting purposes and the
MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for 2009
through 2012 is as follows:

Year MACRS Depreciation Straight line Depreciation Difference
2009 197,600 123,500 74,100
2010 118,560 123,500 -4,940
2011 71,136 123,500 -52,364
2012 71,136 123,500 -52,364
The enacted federal income tax rates are 35% for 2008 and 40% for 2009 through 2012. For the year
ended December 31, 2009, Dayton Inc.’s income before income taxes was \$1,120,000.

c. On July 1, 2009, Dayton Inc. issued \$900,000 of 10% bonds. The bonds mature in 20 years and interest
is payable each January 1 and July 1. The bonds were issued at a price to yield the investors 12%. Dayton
Inc. records interest at the effective interest rate.

1. Determine Dayton Inc.’s income tax expense and net income for the year ended December 31, 2009

2. Determine Dayton Inc.’s interest expense for the year ended December 31, 2009.

3. Prepare the long-term liabilities section of Dayton Inc.’s December 31, 2009, balance sheet.

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with AssignmentHelpWeb
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Anthropology
excellent loved the services
Customer 452443, September 23rd, 2022
Excellent service - thank you!
Customer 452469, February 20th, 2023
Nursing
The paper was EXCELLENT. Thank you
Customer 452449, September 23rd, 2022
Architecture, Building and Planning
The assignment was well written and the paper was delivered on time. I really enjoyed your services.
Customer 452441, September 23rd, 2022
Job well done. Finish paper faster than expected. Thank you!
Customer 452451, October 3rd, 2022
Theology
Job well done and completed in a timely fashioned!
Customer 452451, November 18th, 2022
Thank you!
Customer 452451, November 27th, 2022
Psychology
Thanks a lot the paper was excellent
Customer 452453, October 26th, 2022
English 101
Very good job. I actually got an A
Customer 452443, September 25th, 2022
Anthropology
Excellent services will definitely come back
Customer 452441, September 23rd, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend