Blue Corporation entered into a lease agreement on January 1,2020,
Blue Corporation entered into a lease agreement on January 1,2020, to provide Crane Company with a piece of machinery. The terms of the lease agreement were as follows.
1. The lease is to be for 3 years with rental payments of \(\$ 15,990\) to be made at the beginning of each year.
2. The machinery has a fair value of \(\$ 63,000\), a book value of \(\$ 40,000\), and an economic life of 8 years.
At the end of the lease term, both parties expect the machinery to have a residual value of \(\$ 20,000\), none of which is
3. At guaranteed.
The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset
4. is not of a specialized nature.
5. The implicit rate is \(5 \%\), which is known by Crane.
6. Collectibility of the payments is probable.
Homework Answers
Problem 21A-16 b-e (Part Level Submission) Blue Corporation entered into a lease agreement on January 1,...
Problem 21A-16 b-e (Part Level Submission) Blue Corporation entered into a lease agreement on January 1, 2017, to provide Crane Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $13,500 to be made at the beginning of each year. 2. The machinery has a fair value of $64,000, a book value (depreciable base for the lessor) of $40,000, and an economic...
Sheffield Corporation entered into a lease agreement on January 1, 2017, to provide Pharoah Company with...
Sheffield Corporation entered into a lease agreement on January
1, 2017, to provide Pharoah Company with a piece of machinery. The
terms of the lease agreement were as follows.
1.
The lease is to be for 3 years with rental payments of $13,700
to be made at the beginning of each year.
2.
The machinery has a fair value of $65,000, a book value
(depreciable base for the lessor) of $40,000, and an economic life
of 8 years.
3.
At...
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Cullumber Company leases a building to Walsh, Inc. on January 1, 2017. The following facts pertain...
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Problem 21A-16 b-e (Part Level Submission) Blue Corporation entered into a lease agreement on January 1, 2017, to provide Crane Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $13,500 to be made at the beginning of each year. 2. The machinery has a fair value of $64,000, a book value (depreciable base for the lessor) of $40,000, and an economic...
Sheffield Corporation entered into a lease agreement on January
1, 2017, to provide Pharoah Company with a piece of machinery. The
terms of the lease agreement were as follows.
1.
The lease is to be for 3 years with rental payments of $13,700
to be made at the beginning of each year.
2.
The machinery has a fair value of $65,000, a book value
(depreciable base for the lessor) of $40,000, and an economic life
of 8 years.
3.
At...
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