Homework Answers
| A | For ASU it is a finance Lease,As the equipment is lease for a major portion of the life of the asset.The asset is also transfer to the lessee | ||
| b | Present value of minimum lease payment | ||
| Lease payment | 73,975.00 | ||
| PVAF @ 10% for 10 period beginning of the year | 6.76 | ||
| Present value of minimum lease payment | 499,998.50 | ||
| c | Journal Entries | ||
| Bank | 73,975.00 | ||
| Lease receivable | 73,975 | ||
Add Answer to:
Problem #6: Lessor Accounting ASU Capital Corporation uses noncancelable leases as a means of selling its...
LESSOR ACCOUNTING – PROBLEM 2 Using the same data of the previous exercise and assuming the...
LESSOR ACCOUNTING – PROBLEM 2
Using the same data of the previous exercise and assuming the
following information, you will
answer this exercise from the point of view of the lessor:
Collectibility of the payments is
reasonably predictable, and there are no important
uncertainties surrounding the costs
yet to be incurred by XYZ.
Additional information:
1. Asset’s cost $1,500,000.
2. Asset’s FMV - $2,800,000
Required:
Prepare journal entries for the year 2019.
LESSEE ACCOUNTING - PROBLEM 1 ABC Company (ABC),...
LESSOR ACCOUNTING - PROBLEM 2 Using the same data of the previous exercise and assuming the...
LESSOR ACCOUNTING - PROBLEM 2 Using the same data of the previous exercise and assuming the following information, you will answer this exercise from the point of view of the lessor: Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by XYZ. Additional information: 1. Asset's cost $1,500,000. 2. Asset's FMV - $2,800,000 Required: a. Prepare journal entries for the year 2019. LESSEE ACCOUNTING - PROBLEM 1 ABC Company...
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...
LESSEE ACCOUNTING - PROBLEM 1 ABC Company (ABC), on January 1, 2019, enters into a 10-year...
LESSEE ACCOUNTING - PROBLEM 1 ABC Company (ABC), on January 1, 2019, enters into a 10-year noncancelable lease for equipment having an estimated useful life of 10 years. XYZ Corp.'s implicit interest rate is 8%. ABC uses the straight-line method to depreciate its assets. The lease contains the following provisions: 1. Rental payments of $200,000 at the beginning of each six-month period (SEMIANNUAL PAYMENTS). 2. A guarantee by ABC that XYZ Corp. (XYZ) will realize $100,000 from selling the asset...
Lessee Company leases heavy equipment on January 1, 2016, under a capital lease from Lessor Company...
Lessee Company leases heavy equipment on January 1, 2016, under a capital lease from Lessor Company with the following lease provisions: 1. The lease is non-cancelable and has a term of 10 years 2. The lease does not contain a renewal or bargain purchase option 3. The annual rentals are 27,653.77, payable at the beginning of each year. 4. Lessee agrees to pay all executory costs 5. The interest rate implicit in the lease is 12%, which is known by...
On January 1, 2016, Ballieu Company leases specialty equipment with an economic life of 8 years...
On January 1, 2016, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: • The lease is noncancelable and has a term of 8 years. • The annual rentals are $31,000, payable at the beginning of each year. • The interest rate implicit in the lease is 12%. • Anderson agrees to pay all executory costs and is given an option to buy the equipment for...
Exercise 21-7 On January 1, 2017, Stellar Company leased equipment to Pearl Corporation. The following information pertains to this lease. 1 The term of the noncancelable lease is 6 years, with n...
Exercise 21-7 On January 1, 2017, Stellar Company leased equipment to Pearl Corporation. The following information pertains to this lease. 1 The term of the noncancelable lease is 6 years, with no renenal option. The equipment reverts to the lessor at the termination of the lease. Equal rental payments are due on January 1 of each yeas, beginning in 2017 The fair value of the equipment on January 1, 2017, is $160,000, and ies cost is $128,000. The equipment has...
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...
LESSOR ACCOUNTING – PROBLEM 2
Using the same data of the previous exercise and assuming the
following information, you will
answer this exercise from the point of view of the lessor:
Collectibility of the payments is
reasonably predictable, and there are no important
uncertainties surrounding the costs
yet to be incurred by XYZ.
Additional information:
1. Asset’s cost $1,500,000.
2. Asset’s FMV - $2,800,000
Required:
Prepare journal entries for the year 2019.
LESSEE ACCOUNTING - PROBLEM 1 ABC Company (ABC),...
LESSOR ACCOUNTING - PROBLEM 2 Using the same data of the previous exercise and assuming the following information, you will answer this exercise from the point of view of the lessor: Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by XYZ. Additional information: 1. Asset's cost $1,500,000. 2. Asset's FMV - $2,800,000 Required: a. Prepare journal entries for the year 2019. LESSEE ACCOUNTING - PROBLEM 1 ABC Company...
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...
LESSEE ACCOUNTING - PROBLEM 1 ABC Company (ABC), on January 1, 2019, enters into a 10-year noncancelable lease for equipment having an estimated useful life of 10 years. XYZ Corp.'s implicit interest rate is 8%. ABC uses the straight-line method to depreciate its assets. The lease contains the following provisions: 1. Rental payments of $200,000 at the beginning of each six-month period (SEMIANNUAL PAYMENTS). 2. A guarantee by ABC that XYZ Corp. (XYZ) will realize $100,000 from selling the asset...
Exercise 21-7 On January 1, 2017, Stellar Company leased equipment to Pearl Corporation. The following information pertains to this lease. 1 The term of the noncancelable lease is 6 years, with no renenal option. The equipment reverts to the lessor at the termination of the lease. Equal rental payments are due on January 1 of each yeas, beginning in 2017 The fair value of the equipment on January 1, 2017, is $160,000, and ies cost is $128,000. The equipment has...
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...
Most questions answered within 3 hours.
-
1-Write an algorithm to get two numbers from the user (as
inputs) and calculate the sum...
asked 2 hours ago -
Define white-collar crime. What is the difference between
offender and offense-based definitions of white-collar crime? What...
asked 3 hours ago -
Consider a reaction which is 1st order with respect to A and 1st
order with respect...
asked 3 hours ago -
c++
The length of the hypotenuse of a right-angled triangle is the
square root of the...
asked 3 hours ago -
When a metal rod is heated, not only its resistance but also its
length and cross‐sectional...
asked 3 hours ago -
write a c++ program that computes the L^1 - Norm of a given
vector (L^1 norm...
asked 4 hours ago -
A manufacturer of banana chips would like to know whether its
bag filling machine works correctly...
asked 4 hours ago -
Complete the chapter case, "Turnover Analysis".
Chapter Case
Turnover Analysis
You recently completed your company’s new...
asked 4 hours ago -
What is the pH of solutions having the following H3O+
concentrations? Identify each as acidic, basic,...
asked 4 hours ago -
How does over-voltage of the diode usually occur?
asked 4 hours ago -
If you step on a dirty nail, your doctor will recommend you
update your Tetanus vaccination....
asked 4 hours ago -
Suppose that decreases in the price of milk lead to decrease s
in the retail prices...
asked 4 hours ago