Homework Answers
| Answer:- | |
| Total Lease Payment = Annual Lease Payment * Number of Years + Value of Rights Asset | |
| Total Lease Payment | 840000*8+13,550,000 |
| Total Lease Payment | $20,270,000 |
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Brief Exercise 21-03 Metlock Company leases a building and land. The lease term is 8 years...
Kingbird Company leases a building and land. The lease term is 7 years and the annual fixed payments are $720,000. The lease arrangement gives Kingbird the right to purchase the building and land for...
Kingbird Company leases a building and land. The lease term is 7 years and the annual fixed payments are $720,000. The lease arrangement gives Kingbird the right to purchase the building and land for $13,000,000 at the end of the lease. Based on an economic analysis of the lease at the commencement date, Kingbird is reasonably certain that the fair value of the leased assets at the end of lease term will be much higher than $13,000,000. What are the...
Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest...
Ace Leasing acquires equipment and leases it to customers under
long-term sales-type leases. Ace earns interest under these
arrangements at a 6% annual rate. Ace leased a machine it purchased
for $690,000 under an arrangement that specified annual payments
beginning at the commencement of the lease for five years. The
lessee had the option to purchase the machine at the end of the
lease term for $200,000 when it was expected to have a residual
value of $250,000. (FV of...
Brief Exercise 21-06 Metlock Company leased equipment from Costner Company, beginning on December 31, 2019. The...
Brief Exercise 21-06 Metlock Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 6 years and requires equal rental payments of $24,542 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $120,000, an estimated useful life of 6 years, and no estimated residual value. The appropriate interest rate is 9%. Click here...
Accounts Payable Accumulated Depreciation-Building Accumulated Depreciation-Leased Building Accumulated Depreciation-Capital Leases Accumulated Depreciation-Equipment Accumulated Depreciation-Leased Equipment Accumulated...
Accounts Payable
Accumulated Depreciation-Building
Accumulated Depreciation-Leased Building
Accumulated Depreciation-Capital Leases
Accumulated Depreciation-Equipment
Accumulated Depreciation-Leased Equipment
Accumulated Depreciation-Leased Machinery
Accumulated Depreciation-Machinery
Advertising Expense
Amortization Expense
Airplanes
Buildings
Cash
Cost of Goods Sold
Deferred Gross Profit
Deposit Liability
Depreciation Expense
Equipment
Executory Costs
Executory Costs Payable
Gain on Disposal of Equipment
Gain on Disposal of Plant Assets
Gain on Lease
Insurance Expense
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Leased Asset
Leased Buildings
Leased Equipment
Lease Expense
Leased Land...
Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest...
Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest under these arrangements at a 4% annual rate. Ace leased a machine it purchased for $770,000 under an arrangement that specified annual payments beginning at the commencement of the lease for five years. The lessee had the option to purchase the machine at the end of the lease term for $200,000 when it was expected to have a residual value of $330,000. (FV of...
Brief Exercise 15-13 Purchase option; lessor; sales-type lease [LO15-2, 15-3, 15-6] Ace Leasing acquires equipment and...
Brief Exercise 15-13 Purchase option; lessor; sales-type lease [LO15-2, 15-3, 15-6] Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest under these arrangements at a 5% annual rate. Ace leased a machine it purchased for $710,000 under an arrangement that specified annual payments beginning at the commencement of the lease for five years. The lessee had the option to purchase the machine at the end of the lease term for $100,000 when it...
Exercise 21A-3 a-g Metlock Company leases an automobile with a fair value of $11,845 from John...
Exercise 21A-3 a-g
Metlock Company leases an automobile with a fair value of $11,845
from John Simon Motors, Inc., on the following terms:
1.
Non-cancelable term of 50 months.
2.
Rental of $240 per month (at the beginning of each month). (The
present value at 0.5% per month is $10,648.)
3.
Metlock guarantees a residual value of $1,240 (the present
value at 0.5% per month is $966). Metlock expects the probable
residual value to be $1,240 at the end of...
Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest...
Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest under these arrangements at a 6% annual rate. Ace leased a machine it purchased for $620,000 under an arrangement that specified annual payments beginning at the commencement of the lease for five years. The lessee had the option to purchase the machine at the end of the lease term for $150,000 when it was expected to have a residual value of $180,000. (FV of...
The following facts pertain to a non-cancelable lease agreement between Metlock Leasing Company and Ivanhoe Company,...
The following facts pertain to a non-cancelable lease agreement between Metlock Leasing Company and Ivanhoe Company, a lessee. May 1, 2020 Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate $19,656.69 $7,000 5 years 10 years $65,000 $93,000 6%...
Exercise 21-03 Shamrock Company leases an automobile with a fair value of $18,013 from John Simon...
Exercise 21-03 Shamrock Company leases an automobile with a fair
value of $18,013 from John Simon Motors, Inc., on the following
terms: 1. Non-cancelable term of 50 months. 2. Rental of $370 per
month (at the beginning of each month). (The present value at 0.5%
per month is $8,873.) 3. Shamrock guarantees a residual value of
$1,600 (the present value at 0.5% per month is $920). Delaney
expects the probable residual value to be $1,600 at the end of the...
Ace Leasing acquires equipment and leases it to customers under
long-term sales-type leases. Ace earns interest under these
arrangements at a 6% annual rate. Ace leased a machine it purchased
for $690,000 under an arrangement that specified annual payments
beginning at the commencement of the lease for five years. The
lessee had the option to purchase the machine at the end of the
lease term for $200,000 when it was expected to have a residual
value of $250,000. (FV of...
Brief Exercise 21-06 Metlock Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 6 years and requires equal rental payments of $24,542 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $120,000, an estimated useful life of 6 years, and no estimated residual value. The appropriate interest rate is 9%. Click here...
Accounts Payable
Accumulated Depreciation-Building
Accumulated Depreciation-Leased Building
Accumulated Depreciation-Capital Leases
Accumulated Depreciation-Equipment
Accumulated Depreciation-Leased Equipment
Accumulated Depreciation-Leased Machinery
Accumulated Depreciation-Machinery
Advertising Expense
Amortization Expense
Airplanes
Buildings
Cash
Cost of Goods Sold
Deferred Gross Profit
Deposit Liability
Depreciation Expense
Equipment
Executory Costs
Executory Costs Payable
Gain on Disposal of Equipment
Gain on Disposal of Plant Assets
Gain on Lease
Insurance Expense
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Leased Asset
Leased Buildings
Leased Equipment
Lease Expense
Leased Land...
Ace Leasing acquires equipment and leases it to customers under long-term sales-type leases. Ace earns interest under these arrangements at a 4% annual rate. Ace leased a machine it purchased for $770,000 under an arrangement that specified annual payments beginning at the commencement of the lease for five years. The lessee had the option to purchase the machine at the end of the lease term for $200,000 when it was expected to have a residual value of $330,000. (FV of...
Exercise 21A-3 a-g
Metlock Company leases an automobile with a fair value of $11,845
from John Simon Motors, Inc., on the following terms:
1.
Non-cancelable term of 50 months.
2.
Rental of $240 per month (at the beginning of each month). (The
present value at 0.5% per month is $10,648.)
3.
Metlock guarantees a residual value of $1,240 (the present
value at 0.5% per month is $966). Metlock expects the probable
residual value to be $1,240 at the end of...
The following facts pertain to a non-cancelable lease agreement between Metlock Leasing Company and Ivanhoe Company, a lessee. May 1, 2020 Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate $19,656.69 $7,000 5 years 10 years $65,000 $93,000 6%...
Exercise 21-03 Shamrock Company leases an automobile with a fair
value of $18,013 from John Simon Motors, Inc., on the following
terms: 1. Non-cancelable term of 50 months. 2. Rental of $370 per
month (at the beginning of each month). (The present value at 0.5%
per month is $8,873.) 3. Shamrock guarantees a residual value of
$1,600 (the present value at 0.5% per month is $920). Delaney
expects the probable residual value to be $1,600 at the end of the...
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