Answer-2:
Lease payable liability as on December 31, 2018 = $52,45,818
Lease assets as on December 31, 2018 = $55,64,045 (i.e. $58,56,890 - 292,845)
Answer-3:
Total expense = Interest expense + Amortization expense
= $217,700 + 292,845 = $510,545
Amortization expense = $58,56,890 / 5 * 3/12 = 292,845
Explanation:
LEASE AMORTIZATION SCHEDULE | |||||
Year | Opg Bal. | Lease Rent | Interest Exp | Reduction in O/s Liab | Closing Bal. |
(1) | (2) | (3) | (4) = (2) × 8% | (5) = (3) - (4) | (6) = (2) - (5) |
Sep.30, 2018 | $ 58,56,890 | $ 4,14,386 | $ 4,14,386 | $ 54,42,504 | |
Dec.31, 2018 | $ 54,42,504 | $ 4,14,386 | $ 2,17,700 | $ 1,96,686 | $ 52,45,818 |
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $414,386, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straightline basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $420,914, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borrowing rate is 12%. Amortization is recorded on a straightline basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $385,024, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straightline basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $398,076, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borrowing rate is 8%. Amortization is recorded on a straightline basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $371,970, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borrowing rate is 12%. Amortization is recorded on a straightline basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $385,024, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straightline basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of...
NutraLabs, Inc., leased a protein analyzer to Werner Chemical, Inc., on September 30, 2018. NutraLabs manufactured the machine at a cost of $4.2 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $349,131, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. NutraLabs’ implicit interest rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
NutraLabs, Inc., leased a protein analyzer to Werner Chemical, Inc., on September 30, 2018. NutraLabs manufactured the machine at a cost of $4.35 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $358.919. payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. NutraLabs'implicit interest rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)...
NutraLabs, Inc. leased a protein analyzer to Werner Chemical, Inc. on September 30, 2018. NutraLabs manufactured the machine at a cost of $5 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $391,548, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. NutraLabs' implicit interest rate is 12%. Required: 1. Determine the price at which NutraLabs is "selling" the equipment (present value of the lease payments)...
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc. on September 30, 2018. Abbott purchased the machine from NutraLabs, Inc., at a cost of $6.25 million. The five-year lease agreement calls for Werner to make quarterly lease payments of $407,863, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Abbot's implicit interest rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1...