Homework Answers
Note:
1. The lease contract shall be recognized for the period covering the non cancellable period and the period covered by an option to extend the contract only if the lessee is reasonably certain to exercise the option. In the given case, since no significant economic incentive exists for the 3 year term, the lease term shall be 7 years only.
2. The lease liability shall be measured at the present value of future lease payment discounted at the rate of 4% as given.
3. In the absence of other costs, ROU asset shall be recognized at an amount equal to lease liability.
4. Every year, the lease liability shall be increased by the rate of 4%, while actual lease payment shall reduce the lease liability.
5. The ROU asset shall be amortized using straight line method for the lease term ie. 7 years.
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Chapter 15 - Homework Served 15 On January 1, 2021, Rick's Pawn Shop leased a truck...
the entries are correct please help on the amounts!! On January 1, 2021, Rick's Pawn Shop...
the entries are correct please help on the amounts!!
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a seven-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $16,500 due on December 31 of each year, calculated by the lessor using a 4% interest rate. The agreement is considered...
15 On January 1, 2018, Rick's Pawn Shop leased a truck from Chumley Motors for a...
15 On January 1, 2018, Rick's Pawn Shop leased a truck from Chumley Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are S 19,000 due on December 31 of each year, calculated by the lessor using a 5% nterest rate. The agreement is considered an operating lease. (FV of S1. PV...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $17,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2023,...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $16,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2023, Rick's...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $21,000 due on December 31 of each year, calculated by the lessor using a 6% discount rate. Assume that at the beginning of the third year, January 1, 2023. Rick's...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $11,000 due on December 31 of each year, calculated by the lessor using a 7% discount rate. Assume that at the beginning of the third year, January 1, 2023, Rick's...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Corey Motors for a six-year...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $10,000 due on December 31 of each year, calculated by the lessor using a 5% interest rate. The agreement is considered an operating lease.Required:1. Prepare Rick’s journal entry to record...
On January 1, 2021, Rick’s Pawn Shop leased a truck from Corey Motors for a six-year...
On January 1, 2021, Rick’s Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $15,000 due on December 31 of each year, calculated by the lessor using a 6% discount rate. Assume that at the beginning of the third year, January 1, 2023, Rick’s...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a six-year...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a six-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $14,000 due on December 31 of each year, calculated by the lessor using a 7% discount rate. The expected useful life of the asset is 9 years and its fair...
On January 1, 2021. Winn Heat Transfer leased office space under a three-year operating lease agreement....
On January 1, 2021. Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $93.000 each, beginning December 31, 2021. and at each December 31 through 2023. The lessor HVAC Leasing calculates lease payments based on an annual Interest rate of 8% Winn also paid a $204,000 advance payment at the beginning of the lease. With permission of the owner. Winn made structural modifications to the building before occupying the...
the entries are correct please help on the amounts!!
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a seven-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $16,500 due on December 31 of each year, calculated by the lessor using a 4% interest rate. The agreement is considered...
15 On January 1, 2018, Rick's Pawn Shop leased a truck from Chumley Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are S 19,000 due on December 31 of each year, calculated by the lessor using a 5% nterest rate. The agreement is considered an operating lease. (FV of S1. PV...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $17,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2023,...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $16,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2023, Rick's...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $21,000 due on December 31 of each year, calculated by the lessor using a 6% discount rate. Assume that at the beginning of the third year, January 1, 2023. Rick's...
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $11,000 due on December 31 of each year, calculated by the lessor using a 7% discount rate. Assume that at the beginning of the third year, January 1, 2023, Rick's...
On January 1, 2021. Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $93.000 each, beginning December 31, 2021. and at each December 31 through 2023. The lessor HVAC Leasing calculates lease payments based on an annual Interest rate of 8% Winn also paid a $204,000 advance payment at the beginning of the lease. With permission of the owner. Winn made structural modifications to the building before occupying the...
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