Date | Account titles and Explanation | Debit | Credit |
1) | Equipment | $ 905,861.00 | |
Lease Payable | $ 905,861.00 | ||
2) | Lease Payable | $ 125,000.00 | |
Cash | $ 125,000.00 | ||
3) | Lease payable | $ 115,000.00 | |
Interest Expense (125000 x 8%) | $ 10,000.00 | ||
Cash | $ 125,000.00 | ||
Leases The city of Morehead leased equipment. The life of the noncancellable lease is 10 years....
On January 1, 2017, the Mount Rogers City water department leases a truck under a noncancelable lease agreement meeting the requirements for classification as a capital lease. The present value (8% interest) of the minimum lease payment is $45000, and the lease calls for five annual lease payments of $10435 every January 1, beginning in 2017. The leased truck has a five year life and no salvage. 1. Prepare journal entries for the first year of the lease. 2. How...
A firm leases equipment under a long-term finance lease (analogous to an installment purchase) that calls for 10 annual payments of $50,000. The first payment is due at the inception of the lease. The annual rate on the lease is 3%. What is the value of the leased asset at inception of the lease? (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number)
Deal Leasing leased equipment to Hand Company on January 1, 2018. The lease payments were calculated to provide the lessor a 10% return. Nine annual lease payments of $65,000 are due at the beginning of each year beginning January 1, 2018. The present value of an annuity due of $1 at 10 for Nine periods is 6.33493. Please provide journa entry for Record the lease, Record the cash payment, Record accrued interest, and Record the amortization expense
On January 1, Year 1, Savor Corporation leased equipment to Spree Company. The lease term is 9 years. The first payment of $698,000 was made on January 1, 2018. The present value of the lease payments is $4,561,300. The lease is appropriately classified as an operating lease. Assuming the interest rate for this lease is 9%, how much interest revenue will Savor record in Year 1 on this lease?
On January 1, 2018, Kay Company leased office furniture and equipment from Young Leasing Company. The terms of the lease require annual payments of $25,000 for 20 years with the first payment being due on December 31, 2018. Assume the interest rate on the lease is 10% and the lease qualifies as a capital lease. Calculate the lease liability account balance at December 31, 2019 after the second lease payment is made.
On January 1, 2018, Kay Company leased office furniture and equipment from Young Leasing Company. The terms of the lease require annual payments of $25,000 for 20 years with the first payment being due on December 31, 2018. Assume the interest rate on the lease is 10% and the lease qualifies as a capital lease. Calculate the amount of the lease liability at December 31, 2019 that would be classified as a long-term liability.
Norway Corporation leases equipment from Nova Scotia Company on January 1, 2017. The lease agreement does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. It covers 4 years of the equipment’s 8-year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased.Prepare Norway’s journal entries on January 1, 2017, and December 31, 2017. Assume the annual lease payment is $25,000 at the...
Leases On January 1, Lorraine, Inc., entered into a lease contract. The lease contract was a ten-year lease for a computer with $16,000 annual lease payments due at the end of each year. Lorraine took possession of the computer on January 1. The present value of the lease payments under the lease contract is $117,761. The lease contract is a finance lease. Prepare the journal entry for this lease on January 1 Description Debit Credit $ Cash Interest expense Bonds...
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...
Francisco leased equipment from Julio on December 31,2021. The lease is 10 year lease with annual payments of $150,000 due on December 31 of each year beginning December 31,2021. Julio originally purchased equipment on January 1, 2021 for $1,200,000 and depreciates equipment on a straight line basis over its estimated life of 12 years. Francisco's incremental borrowing rate is 12 % for this type of lease. The implicit rate of 10% is known by the lessee. What should be the...