Homework Answers
| Date | Annual payments | 10% Interest | Reduction of liability | Lease liability |
| 1/1/2021 | 4683287 | |||
| 12/31/2021 | 875000 | 468329 | 406671 | 4276616 |
| 12/31/2022 | 875000 | 427662 | 447338 | 3829277 |
| General Journal | Debit | Credit |
| Leased Machinery | 4683287 | |
| Leased Liability | 4683287 | |
| Interest Expense | 468329 | |
| Lease Liability | 406671 | |
| Cash | 875000 |
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Hughey Co. as lessee records a finance lease of machinery on January 1, 2021. The seven...
II. (5 Points) Hughey Co. as lessee records a capital lease of machinery on January 1,...
II. (5 Points) Hughey Co. as lessee records a capital lease of machinery on January 1, 2018. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and straight line depreciation (no residual value) Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey's journal entries for...
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...
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, Harbor (lessee) signs a five-year lease for equipment that is accounted for as...
On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $21,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of years 1, 2, 3, and 4), and the present value of the five annual lease payments is $90,555, based on an 8% interest rate. 1. Prepare the January 1 journal entry Harbor records at inception of the lease...
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, Harbor (lessee) signs a five-year lease for equipment that is accounted for as...
On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $28,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of years 1, 2, 3, and 4), and the present value of the five annual lease payments is $125,023, based on a 6% interest rate. 1. Prepare the January 1 journal entry Harbor records at inception of the lease...
Required 1 Journal entry 1 - Record lease by lessee. Journal entry 2 - Record the...
Required 1
Journal entry 1 - Record lease by lessee.
Journal entry 2 - Record the cash payment January 1, 2021
Journal entry 3 -Record the cash payment December 31, 2021
Journal entry 4 -Record amortization of the right-of-use asset
on December 31, 2021
Required 2
Journal entry 1 - Record lease by lessor.
Journal entry 2 - Record the cash received (include maintenance
fee accrual)
Journal entry 3 -Record cash received by lessor
On January 1, 2021, NRC Credit...
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...
Exercise 15-33 (Algo) Nonlease payments; lessor and lessee [LO15-2, 15-7] On January 1, 2021, NRC Credit...
Exercise 15-33 (Algo) Nonlease payments; lessor and lessee
[LO15-2, 15-7]
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 $63,000 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...
In a finance lease: the lessee records an asset and a liability for the present value...
In a finance lease: the lessee records an asset and a liability for the present value of lease payments. the lessor records an asset and a liability for the present value of lease payments. the lessee records an asset and a liability for the total of the lease payments. the lessor records an asset and a liability for the total of the lease payments. In connection with a lease of more than 12 months, the lessee always will record each...
II. (5 Points) Hughey Co. as lessee records a capital lease of machinery on January 1, 2018. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and straight line depreciation (no residual value) Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey's journal entries for...
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...
On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $21,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of years 1, 2, 3, and 4), and the present value of the five annual lease payments is $90,555, based on an 8% interest rate. 1. Prepare the January 1 journal entry Harbor records at inception of the lease...
Required 1
Journal entry 1 - Record lease by lessee.
Journal entry 2 - Record the cash payment January 1, 2021
Journal entry 3 -Record the cash payment December 31, 2021
Journal entry 4 -Record amortization of the right-of-use asset
on December 31, 2021
Required 2
Journal entry 1 - Record lease by lessor.
Journal entry 2 - Record the cash received (include maintenance
fee accrual)
Journal entry 3 -Record cash received by lessor
On January 1, 2021, NRC Credit...
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...
Exercise 15-33 (Algo) Nonlease payments; lessor and lessee
[LO15-2, 15-7]
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 $63,000 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...
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