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II. (5 Points) Hughey Co. as lessee records a capital lease of machinery on January 1,...
Hughey Co. as lessee records a finance lease of machinery on January 1, 2021. The seven...
Hughey Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $875,000 are made at the beginning of each year. The present value of the lease payments at 10% is $4,683,287. Hughey uses the effective-interest method of amortization. Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2021 and 2022. (b) Prepare all of Hughey's journal entries for 2021.
rart V. Lessee and Lessor enter into a lease agreement on January 1, 2019. for equipment....
rart V. Lessee and Lessor enter into a lease agreement on January 1, 2019. for equipment. The following data are relevant to the lease agreement: 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 its...
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...
In January 1, 2018, Hester Co. sells machinery to Beck Corp. at its fair value of...
In January 1, 2018, Hester Co. sells machinery to Beck Corp. at its fair value of $960,000 and leases it back. The machinery had a carrying value of $840,000, the lease is for 10 years and the implicit rate is 10%. The lease payments of $142,000 starting on January 1, 2018. Hester uses straight-line depreciation and there is no residual value. Hesters Co journal entry is presented below Hester Co. (Lessee) January 1, 2018 Cash A/C Dr 960,000 To Equipment ...
Part 2: Classifying Leases 1. Lessee Co. leases a common piece of machinery from Lessor Corp....
Part 2: Classifying Leases 1. Lessee Co. leases a common piece of machinery from Lessor Corp. The lease begins on January 1, 2019, and includes the following details: • The lease has a term of four years and is non-cancelable. • The lease contains no renewal or purchase options. The machinery reverts to Lesson Corp. at the termination of the lease. • The machinery has a fair value at commencement of the lease of $40,000, an estimated economic life of...
3. ABC Company, as lessee, enters into a lease agreement on January 1, 2018, for equipment....
3. ABC Company, as lessee, enters into a lease agreement on
January 1, 2018, for equipment. The following data are relevant to
the lease agreement:
1. The term of the noncancelable lease is 4 years, with no
renewal option. Payments of $978,446 are due on January 1of each
year.
2. The fair value of the equipment on January 1, 2018 is
$3,500,000. The equipment has an economic life of 6 years with no
salvage value.
3. ABC Company depreciates similar...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
Hughey Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $875,000 are made at the beginning of each year. The present value of the lease payments at 10% is $4,683,287. Hughey uses the effective-interest method of amortization. Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2021 and 2022. (b) Prepare all of Hughey's journal entries for 2021.
rart V. Lessee and Lessor enter into a lease agreement on January 1, 2019. for equipment. The following data are relevant to the lease agreement: 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 its...
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...
Part 2: Classifying Leases 1. Lessee Co. leases a common piece of machinery from Lessor Corp. The lease begins on January 1, 2019, and includes the following details: • The lease has a term of four years and is non-cancelable. • The lease contains no renewal or purchase options. The machinery reverts to Lesson Corp. at the termination of the lease. • The machinery has a fair value at commencement of the lease of $40,000, an estimated economic life of...
3. ABC Company, as lessee, enters into a lease agreement on
January 1, 2018, for equipment. The following data are relevant to
the lease agreement:
1. The term of the noncancelable lease is 4 years, with no
renewal option. Payments of $978,446 are due on January 1of each
year.
2. The fair value of the equipment on January 1, 2018 is
$3,500,000. The equipment has an economic life of 6 years with no
salvage value.
3. ABC Company depreciates similar...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
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