To raise operating funds, Signal Aviation sold an airplane on January 1, 2021, to a finance...
To raise operating funds, Signal Aviation sold an airplane on January 1, 2021, to a finance company for $770,000. Signal immediately leased the plane back for a 13-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $800,000. Its cost and its book value were $600,000. Its useful life is estimated to be 15 years. The lease requires Signal to make payments of $102,771 to the finance company each January 1. Signal depreciates assets on a straight-line basis. The lease has an implicit rate of 11%.
Required: 1. & 2. Prepare the appropriate entries for Signal on January 1, 2021 and December 31, 2021, to record the transaction and necessary adjustments. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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To raise operating funds, Signal Aviation sold an airplane on
January 1, 2021, to a finance...
To raise operating funds, Signal Aviation sold an airplane on January 1, 2021, to a finance...
To raise operating funds, Signal Aviation sold an airplane on January 1, 2021, to a finance company for $790,000. Signal immediately leased the plane back for a 12-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $820,000. Its cost and its book value were $610,000. Its useful life is estimated to be 14 years. The lease requires Signal to make payments of $105,403 to the finance company each January...
4. value: 3.00 points Exercise 15-26 Sale-leaseback; capital lease [LO15-10] To raise operating funds, Signal Aviation...
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To raise operating funds, National Distribution Center sold its office building to an insurance company on...
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To raise operating funds, National Distribution Center sold its office building to an insurance company on...
To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The...
To raise operating funds, National Distribution Center sold its office building to an insurance company on...
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To raise operating funds, National Distribution Center sold its office building to an insurance company on...
To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The...
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On January 1, 2021, Lesco Leasing leased equipment to Quality Services under a finance/sales-type lease designed...
On January 1, 2021, Lesco Leasing leased equipment to Quality Services under a finance/sales-type lease designed to earn NRC a 12% rate of return for providing long-term financing. The lease agreement specified: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Ten annual payments of $56,000 beginning January 1, 2021, the beginning of the lease and each December 31 thereafter through 2029. The...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 11% rate of return for providing long-term financing. The lease agreement specified the following: Ten annual payments of $64,000 beginning January 1, 2021, the beginning of the lease and each December 31 thereafter through 2029. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $392,223. The lease qualifies...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease...
On January 1, 2021, NRC Credit Corporation leased equipment to
Brand Services under a finance/sales-type lease designed to earn
NRC a 10% rate of return for providing long-term financing. The
lease agreement specified the following:
Ten annual payments of $66,000 beginning January 1, 2021, the
beginning of the lease and each December 31 thereafter through
2029.
The estimated useful life of the leased equipment is 10 years
with no residual value. Its cost to NRC was $412,300.
The lease qualifies...
4. value: 3.00 points Exercise 15-26 Sale-leaseback; capital lease [LO15-10] To raise operating funds, Signal Aviation sold an airplane on January 1, 2016, to a finance company for $850,000. Signal immediately leased the plane back for a 14-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $880,000. Its cost and its book value were $660,000. Its useful life is estimated to be 16 years. The lease requires Signal to...
To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The...
To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The...
To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The...
To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The...
On January 1, 2021, NRC Credit Corporation leased equipment to
Brand Services under a finance/sales-type lease designed to earn
NRC a 10% rate of return for providing long-term financing. The
lease agreement specified the following:
Ten annual payments of $66,000 beginning January 1, 2021, the
beginning of the lease and each December 31 thereafter through
2029.
The estimated useful life of the leased equipment is 10 years
with no residual value. Its cost to NRC was $412,300.
The lease qualifies...
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