Homework Answers
| Date | Account Title and Explanation | Debit ($) | Credit ($) |
| January 1,2017 | Lease Receivable | 152166 | |
| Sales Revenue | 152166 | ||
| (To record the lease) | |||
| January 1,2017 | Cost of goods sold | 110300 | |
| Finised Inventory | 110300 | ||
| (To record Cost ) | |||
| January 1,2017 | Cash | 38400 | |
| Lease Receivable | 38400 | ||
| ( To record first lease payment) |
Explanation:
| Years | Lease rent | PVF | Present value ($) | |
| 1 | 38400 | 1 | 38400 | |
| 2 | 38400 | 0.8929 | 34287.36 | |
| 3 | 38400 | 0.7972 | 27742.56 | |
| 4 | 38400 | 0.7118 | 27333.12 | |
| 5 | 38400 | 0.6355 | 24403.20 | |
| Total Present Value | 152166.24 | |||
Implicit interest rate is 12%
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useful life of the replicator and requires 5 equal annual rentals
of $44,300 payable each January 1, beginning January 1, 2017. An
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no important uncertainties concerning costs.
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of 11% is implicit in the lease agreement. Collectibility of the
rentals is reasonably assured, and there are no important
uncertainties concerning costs.
Prepare Oriole’s January 1, 2017, journal...
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