Question 1 what is the most important part of lease calculations for both the lessee and...
Question 1
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what is the most important part of lease calculations for both the lessee and the lessor?
The lessee calculating the right of use asset and the lessor calculating the implicit interest rate.
The lessee calculating the lease liability and the lessor calculating the lease payment.
The lessee calculating the implicit interest rate and the lessor calculating the right of use asset.
The lessee calculating the lease payment and the lessor calculating the lease receivable.
Homework Answers
In a lease agreement :-
Lessor is the one who allows to use the asset by the other party to aggrement ( called as lessee) for the compensation called lease receivable for lessor and lease payment for lessee.
So our of the options given answer is The lessee caluclating the lease payment and the lessor caluclating the lease receivable is important.
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Question 1
what is the most important part of lease calculations for both
the lessee and...
Part 1) Amortization schedule Part 2) Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. A...
Part 1) Amortization schedule
Part 2) Prepare all of the journal entries for the lessee for
2017 and 2018 to record the lease agreement, the lease payments,
and all expenses related to this lease. Assume the lessee’s annual
accounting period ends on December 31 and reversing entries are
used when appropriate. All executory costs are paid as incurred.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry"...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The follow...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
Problem 21-4 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Alschuler L...
Problem 21-4 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and Sheridan Electronics, a lessee, for a computer system October 1, 2017 Inception date 6 years Lease term Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $275,950 Residual value at end of lease term -0- Lessor's implicit rate 10 % Lessee's incremental borrowing rate 10 % Annual lease payment due at the beginning of each...
2- Pass a journal entries in the books of lease contract by creating lease receivable at...
2- Pass a journal entries in the books of lease contract by creating lease receivable at its net investment in which is equal to the minimum lease payments discounted at the rate of interest implicit in the lease. 3- Pass a journal entries in the in recognition of both an asset and a liability in the books of the lessee at the inception of the lease at amount equal to present value of minimum lease payments. 4- Journalize the transactions...
(LESSEE ENTRIES FOR FINANCING LEASE). The following facts pertain to a non-cancelable lease agreement between Ace...
(LESSEE ENTRIES FOR FINANCING LEASE). The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. Commencement of Lease Date January 1, 2020 Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171 Residual value of equipment at end of lease term, guaranteed by lessee $54,000 Expected residual of equipment that will need to be paid in cash at end of lease term $49,000 Lease term 6...
In computing the present value of the lease payments, the lessee should a. use its incremental...
In computing the present value of the lease payments, the lessee should a. use its incremental borrowing rate in all cases. b. use both its incremental borrowing rate and the implicit rate of the lessor, assuming that the implicit rate is known to the lessee. c. use the implicit rate of the lessor, assuming that the implicit rate is known to the lessee. d. use the implicit rate in all cases.
2. (LESSEE ENTRIES FOR AN OPERATING LEASE). Assume that Ace Leasing Company and King Company, a...
2. (LESSEE ENTRIES FOR AN OPERATING LEASE). Assume that Ace Leasing Company and King Company, a lessee, agreed to the lease shown below instead on the one shown in problem 1. Commencement of Lease Date January 1, 2020 Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171 Lease term 6 years Economic life of leased equipment 10 years Fair Value of asset at January 1, 2020 $950,000 Lessor's Implicit Rate 12% Lessee's incremental...
Part V: Lessee and Lessor enter into a lease agreement on January 1, 2019, for equipment....
Part V: Lessee and Lessor enter into a lease agreement on January 1, 2019, for equipment. The following data are relevant to the lease agreement: 1. The term of the non-cancelable lease is 5 years. Payments of $13,000 including executory costs of $3,000 are due at the end each year. 2. The equipment has an economic life of 10 years with a residual value of $15,000 at the end of the lease, but not guaranteed. The equipment's fair value equals...
Brief Exercise 15-3 (Algo) Lessee and lessor; calculate interest; finance/sales-type lease (LO15-2] A finance lease agreement...
Brief Exercise 15-3 (Algo) Lessee and lessor; calculate interest; finance/sales-type lease (LO15-2] A finance lease agreement calls for quarterly lease payments of $6,809 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $190,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What...
Problem 1: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date...
Problem 1: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the Lease 12/31/Yro Annual lease payment (Payment 1 due immediately) (Present Value =$6,684) $2,338 Guaranteed Residual Value (Lessee expects to meet) (Present Value $1,316) $1,523 Lease Term 3 years Economic Life of Leased Asset 5 years Lessor's Cost of the asset $6,000 Fair Value of the asset $8,000 Lessor's Implicit Rate & Lessee's Incremental Borrowing Rate The collectability of the lease payments by...
Part 1) Amortization schedule
Part 2) Prepare all of the journal entries for the lessee for
2017 and 2018 to record the lease agreement, the lease payments,
and all expenses related to this lease. Assume the lessee’s annual
accounting period ends on December 31 and reversing entries are
used when appropriate. All executory costs are paid as incurred.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry"...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
Problem 21-4 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and Sheridan Electronics, a lessee, for a computer system October 1, 2017 Inception date 6 years Lease term Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $275,950 Residual value at end of lease term -0- Lessor's implicit rate 10 % Lessee's incremental borrowing rate 10 % Annual lease payment due at the beginning of each...
2. (LESSEE ENTRIES FOR AN OPERATING LEASE). Assume that Ace Leasing Company and King Company, a lessee, agreed to the lease shown below instead on the one shown in problem 1. Commencement of Lease Date January 1, 2020 Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171 Lease term 6 years Economic life of leased equipment 10 years Fair Value of asset at January 1, 2020 $950,000 Lessor's Implicit Rate 12% Lessee's incremental...
Part V: Lessee and Lessor enter into a lease agreement on January 1, 2019, for equipment. The following data are relevant to the lease agreement: 1. The term of the non-cancelable lease is 5 years. Payments of $13,000 including executory costs of $3,000 are due at the end each year. 2. The equipment has an economic life of 10 years with a residual value of $15,000 at the end of the lease, but not guaranteed. The equipment's fair value equals...
Brief Exercise 15-3 (Algo) Lessee and lessor; calculate interest; finance/sales-type lease (LO15-2] A finance lease agreement calls for quarterly lease payments of $6,809 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $190,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What...
Problem 1: The following facts pertain to a non-cancelable lease agreement between Lessee and Lessor: Date of the Lease 12/31/Yro Annual lease payment (Payment 1 due immediately) (Present Value =$6,684) $2,338 Guaranteed Residual Value (Lessee expects to meet) (Present Value $1,316) $1,523 Lease Term 3 years Economic Life of Leased Asset 5 years Lessor's Cost of the asset $6,000 Fair Value of the asset $8,000 Lessor's Implicit Rate & Lessee's Incremental Borrowing Rate The collectability of the lease payments by...
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