Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $72,000 under a 5-year lease on December 20, 2018. The lease commences on January 1, 2019, and Leewin will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. The lease agreement stipulates annual payments of $ 10,400, due on January 1 of 2019, 2020, 2021, 2022, and 2023. The implicit rate of the lease is 8% and is known by Leewin. There is no purchase option, no lease incentives, no residual value guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $ 2,000. Assuming that this is classified as an operating lease, what is the amount of the lease liability on January 1, 2019 before the lease payment?
We need at least 10 more requests to produce the answer.
0 / 10 have requested this problem solution
The more requests, the faster the answer.
Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a...
Starboard Industries enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $73,000 under a 5- year lease on December 20, 2018. The lease commences on January 1, 2019, and Starboard will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. Starboard made a lease payment of $10,300 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,300, due...
Skysong Company leases an automobile with a fair value of $18,680 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $380 per month (at the beginning of each month). 3. Skysong guarantees a residual value of $1,870. Delaney expects the probable residual value to be $1,870 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Skysong’s incremental borrowing rate is 6% a...
Part V: Lessee and Lessor enter into a lease agreement on January 1, 2019, for equipment. The following data are relevant to the lease agreement: 1. The term of the non-cancelable lease is 5 years. Payments of $13,000 including executory costs of $3,000 are due at the end each year. 2. The equipment has an economic life of 10 years with a residual value of $15,000 at the end of the lease, but not guaranteed. The equipment's fair value equals...
5. Accounting for Lease Agreement - Lessee (18 points) Gopher Sales and Service entered into a lease agreement to lease a fleet of five vehicles from Hawkeye Motors. The term of the lease is five years and Gopher makes annual payments of $21,000 per year beginning on January 1, 2017 (and then every December 31 through December 31, 2020). January 1, 2017 is also the lease commencement date. Gopher does not guarantee any residual value in the lease agreement. Gopher...
rart V. Lessee and Lessor enter into a lease agreement on January 1, 2019. for equipment. The following data are relevant to the lease agreement: The term of the non-cancelable lease is 5 years. Payments of $13.000 including executory costs of $3.000 are due at the end each year. 2. The equipment has an economic life of 10 years with a residual value of $15,000 at the end of the lease, but not guaranteed. The equipment's fair value equals its...
Giselle Ltd enters into a finance lease agreement on the following terms. What is the fair value of the equipment at the inception of the lease (rounded to the nearest dollar)? [3.3121.0.7350] Duration of lease 4 years Life of leased asset 6 years Guaranteed residual $0 Unguaranteed residual $0 Bargain Purchase Option $4,000 Lease payment at inception $0 Annual lease payments (paid at year ends) $10,000 Interest rate implicit in lease 8% $34 518 $39 736 $36 061 $33 121
Lancia Company leases an automobile with a fair value of $13,627 from Vauxhall Motors, Inc., on the following terms: 1). Noncancelable term of 50 months. 2). Rental of $320 per month (at end of each month). (The present value at 1% per month is $12,543.) 3). Estimated residual value after 50 months is $1,110. (The present value at 1% per month is $675.) Lancia Company guarantees the residual value of $1,110. 4). Estimated economic life of the automobile is 60...
Acumen Ltd enters into a 5-year agreement to lease an item of machinery from Ascor Ltd on 1 July 2019. Acumen Ltd incurred costs of $3928 in setting up the lease agreement. The machinery has a fair value of $492 000 at the inception of the lease and it is expected to have an economic life of 6 years, after which time it will have a residual value of $45 000. The lease agreement details are as follows. All insurance...
Lancia Company leases an automobile with a fair value of $13,627 from Vauxhall Motors, Inc., on the following terms: 1). Noncancelable term of 50 months. 2). Rental of $320 per month (at end of each month). (The present value at 1% per month is $12,543.) 3). Estimated residual value after 50 months is $1,110. (The present value at 1% per month is $675.) Lancia Company guarantees the residual value of $1,110. 4). Estimated economic life of the automobile is 60...
Tamarisk Company leases an automobile with a fair value of $14,092 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $290 per month (at the beginning of each month). 3. Tamarisk guarantees a residual value of $1,220. Delaney expects the probably residual value to be $1,220 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Tamarisk's incremental borrowing rate is 6% a...