please refer to problem 4 which is also attached for more
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Homework Answers
Answer:
a. Calculation of lease Payment
= Annual lease payment *Amunity lease payment
=10,000*9% sum of Anuity facture.
=10,000*5.32
=50,320/-
b.
this is finance lease because substansal part is covered
=50320/75000= 67.09%
C.
Assets Account Dr. 75,000
To Lessor 75,000
D.
Lessee A/cc Dr 75,000
To Assets 75,000
Add Answer to:
please refer to problem 4 which is also attached for more
info
Problem 5. Everything remains...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
problem lease the equipewear. The te porta an the beginning on to have a recolectabilang Problem...
problem lease the equipewear. The te porta an the beginning on to have a recolectabilang Problem II (15 points): Adam, Bevc, wurchased p o sting $45,226 wamy 1, immediately leased the equipment toob Commy for a four-year period with real 58.000 to be 6%. The paid at the beginning of each year. The less's implicit interest rate in connection with w pment is expected to have a resichual value of at the end of the www.cancelable lease, and a useful...
Advanced Accounting II Chapter 21 - Leases Problem 1. On January 1, 2019, Wilcox Inc. leased...
Advanced Accounting II Chapter 21 - Leases Problem 1. On January 1, 2019, Wilcox Inc. leased equipment from Zed Co. for use in the engineering The noncancelable lease is for 6 years with an unguaranteed residual value of $5.000 and the estimated economie life of the leased equipment is 10 years. The lease does not contain automatic title transfer or a bargam pum option Lease payments are $9,000 per year, payable ench December 31. The incremental borrowing rate for WHICON...
Problem 2. Jason Inc. uses leases as a means of selling its equipment. On January 1,...
Problem 2. Jason Inc. uses leases as a means of selling its equipment. On January 1, 2019, Jason leased a machine to Jeremy Manufacturing. The cost of the machine to Jason was $26,000. The fair market value (which was the sales price) was $29,991 at the time of the noncancelable lease. Jason expects to receive the full fair value of the equipment at 8% through the lease. Annual lease payments are payable each December 31 for 5 years. The machine's...
Problem 2. Jason Inc. uses leases as a means of selling its equipment. On January 1,...
Problem 2. Jason Inc. uses leases as a means of selling its equipment. On January 1, 2019, Jason leased a machine to Jeremy Manufacturing. The cost of the machine to Jason was $26,000. The fair market value (which was the sales price) was $29,991 at the time of the noncancelable lease. Jason expects to receive the full fair value of the equipment at 8% through the lease. Annual lease payments are payable each December 31 for 5 years. The machine's...
PLEASE SHOW THE STEPS Part VI: Lessee and Lessor on January 1, 2019 enter into a...
PLEASE SHOW THE STEPS
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The follow...
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
Problem 4. On January 1, 2019. Erk, the lessee, and Betty, the lessor, signed a noncancelable lease agreement for Betty's equipment with a carrying amount of $75,000. The lease term is seven years with rental payments of $10,000 at the beginning of each year. Erk's incremental borrowing rate is 9%. The equipment is expected to have a residual value of $15,000 at the end of the lease, unguaranteed, and a useful life of 15 years. The collectability of the lease...
problem lease the equipewear. The te porta an the beginning on to have a recolectabilang Problem II (15 points): Adam, Bevc, wurchased p o sting $45,226 wamy 1, immediately leased the equipment toob Commy for a four-year period with real 58.000 to be 6%. The paid at the beginning of each year. The less's implicit interest rate in connection with w pment is expected to have a resichual value of at the end of the www.cancelable lease, and a useful...
Advanced Accounting II Chapter 21 - Leases Problem 1. On January 1, 2019, Wilcox Inc. leased equipment from Zed Co. for use in the engineering The noncancelable lease is for 6 years with an unguaranteed residual value of $5.000 and the estimated economie life of the leased equipment is 10 years. The lease does not contain automatic title transfer or a bargam pum option Lease payments are $9,000 per year, payable ench December 31. The incremental borrowing rate for WHICON...
Problem 2. Jason Inc. uses leases as a means of selling its equipment. On January 1, 2019, Jason leased a machine to Jeremy Manufacturing. The cost of the machine to Jason was $26,000. The fair market value (which was the sales price) was $29,991 at the time of the noncancelable lease. Jason expects to receive the full fair value of the equipment at 8% through the lease. Annual lease payments are payable each December 31 for 5 years. The machine's...
Problem 2. Jason Inc. uses leases as a means of selling its equipment. On January 1, 2019, Jason leased a machine to Jeremy Manufacturing. The cost of the machine to Jason was $26,000. The fair market value (which was the sales price) was $29,991 at the time of the noncancelable lease. Jason expects to receive the full fair value of the equipment at 8% through the lease. Annual lease payments are payable each December 31 for 5 years. The machine's...
PLEASE SHOW THE STEPS
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting...
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Part VI: Lessee and Lessor on January 1, 2019 enter into a 4-year non-cancelable lease, with two renewal options of one year each, for equipment having a useful life of 12 years. Lessee's incremental borrowing rate is 8% while Lessor's implicit rate is 5% and known to Lessee. The Lessee uses the straight-line method of depreciation. The lease contains the following provisions: 1. Annual rental payments of $20,000 payable at the beginning of each year, starting January 1, 2019. 2....
Lessor Sales Company and Lessee Manufacturing Company agreed to a noncancelable lease. The following in- formation is available to both entities regarding the lease terms and the leased asset. I. Lessor's cost of the leased asset was $30,000. The asset was new at the inception of the lease term. 2. Lease term is three years starting January 1,2020 3. Estimated useful life of the leased asset is six years. Estimated residual value at end of six years is zero. 4....
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