Exercise 21-13 On January 1, 2017, a machine was purchased for $949,600 by Blue Co. The...
Exercise 21-13 On January 1, 2017, a machine was purchased for $982,400 by Coronado Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to Whispering Inc. on January 1, 2017, at an annual rental of $224,400. Other relevant information is as follows. 1. The lease term is for 3 years. 2. Coronado Co. incurred maintenance and other executory costs of $26,300 in...
Exercise 21-14 February 20, 2017, Vaughn Inc. purchased a machine for $1,563,600 for the purpose of leasing it. The machine is expected to have a 10-year life, no res basis. The machine was leased to Bram ble Company on March 1, 2017, for a 4-year period at a monthly rental of $19,300. and will be depreciated on the straight-line There is no provision for the renewal of the associated with negotiating the lease in February 2017. e of the machine...
Maris Co. purchased a machine on January 1, 2018, for $700,000 for the express purpose of leasing it. The machine is expected to have a 5-year life, no salvage value, and be depreciated on a straight-line monthly basis. On April 1, 2018, under a cancelable lease, Maris leased the machine to Dunbar Company for $450,200 a year for a 4-year period ending March 31, 2022. Maris incurred total maintenance and other related costs under the provisions of the lease of...
On January 1, 2017, Sage Co. leased a building to Pronghorn Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. 2. The leased building cost $4,870,000 and was purchased for cash on January 1, 2017. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $268,500 per year and are made at the end of the...
Exercise 21-14 Your answer is partially correct. Try again. On February 20, 2017, Grouper Inc. purchased a machine for $1,402,800 for the purpose of leasing it. The machine is expected to have a 10-year life, no residual value, and will be depreciated on the straight- line basis. The machine was leased to Monty Company on March 1, 2017, for a 4-year period at a monthly rental of $19,700. There is no provision for the renewal of the lease or purchase...
Exercise 21-12 On January 1, 2017, Monty Co. leased a building to Flounder Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. 2. The leased building cost $4,805,000 and was purchased for cash on January 1, 2017. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $267,700 per year and are made at the end...
Bristol Company leased a machine from Harvard Leasing Company on January 1, 2017. The non-cancellable lease term is 4 years. The following data relate to this lease: 1. Harvard purchased the machine for $363,950 at a cost equal to its fair market value. 2. The economic life of the machine is 6 years with no salvage value at the end of 6 years. 3. Payments are on January 1 of each year starting in 2017 (an annuity due). 4. The...
On January 1, 2017, Sheffield Company contracts to lease equipment for 5 years, agreeing to make a payment of $109,913 at the beginning of each year, starting January 1, 2017. The leased equipment is to be capitalized at $466,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Sheffield’s incremental borrowing rate is 6%, and the implicit rate in the lease is 9%, which is known by Sheffield....
Exercise 21-6 Kingbird Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2017. The lease is for an 8-year period and requires equal annual payments of $38,514 at the beginning of each year. The first payment is received on January 1, 2017. Kingbird had purchased the machine during 2016 for $186,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Kingbird. Kingbird set the...
On January 1, 2017, Concord Co. leased a building to Marigold Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. 2. The leased building cost $4,380,000 and was purchased for cash on January 1, 2017. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $284,100 per year and are made at the end of the...