Assume that IBM leased equipment that was
carried at a cost of $195,000 to Cullumber Company. The term of the
lease is 7 years December 31, 2016, with equal rental payments of
$39,018 beginning December 31, 2016. The fair value of the
equipment at commencement of the lease is $225,000. The equipment
has a useful life of 7 years with no salvage value. The lease has
an implicit interest rate of 7%, no bargain purchase option, and no
transfer of title. Collectibility of lease payments for IBM is
probable.
Prepare IBM’s December 31, 2016, journal entries at commencement of
the lease.
Assume that IBM leased equipment that was carried at a cost of $195,000 to Cullumber Company. The...
Brief Exercise 21A-11
Assume that IBM leased equipment that was
carried at a cost of $189,000 to Blossom Company. The term of the
lease is 6 years December 31, 2016, with equal rental payments of
$43,864 beginning December 31, 2016. The fair value of the
equipment at commencement of the lease is $219,000. The equipment
has a useful life of 6 years with no salvage value. The lease has
an implicit interest rate of 8%, no bargain purchase option, and...
Assume that IBM leased equipment that was carried at a cost of $104,000 to Sheridan Company. The term of the lease is 6 years December 31, 2016, with equal rental payments of $26,273 beginning December 31, 2016. The fair value of the equipment at commencement of the lease is $134,000. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 7%, no bargain purchase option, and no transfer of...
Assume that IBM leased equipment that was camried at a cost of $150,000 to Blossom Company. The term of the lease is 5 years December 31, 2019, with equal rental payments of $30,044 beginning December 31, 2019. The fairvalue of the equipment at commencement of the lease is $129,554. The equipment has a useful lide of 5 years with no salvage value. The lease has an implicit interest rate of 8% no bargain purchase option, and no transfer of title....
Assume the leased equipment that was carried at a cost of $150,000 to Blossom Company. The term of the lease is 5 years December 31, 2019, with equal rental payments of $30,044 beginning December 31, 2019. Their value of the equipment at commencement of the lease is $129,554. The equipment has a useful life of 5 years with no salvage value. The lease has an implicit interest rate of B no bain purchase option, and no transfer of title Collectibility...
8:23 . ill eTextbook Wiley el Con Collaboration W PLUS Support Question 6 View Policies Current Attempt in Progress Assume that IBM leased equipment that was carried at a cost of $201,000 to Pharoah Company. The term of the lease is 7 years December 31, 2019, with equal rental payments of $36,639 beginning December 31, 2019. The fair value of the equipment at commencement of the lease is $200,999. The equipment has a useful life of 7 years with no...
*Exercise 21A-12 a-f On January 1, 2017, Cullumber Company leased equipment to Flynn Corporation. The following information pertains to this lease: The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $2,000, while the expected residual value at the end of the lease is $6,000. 2. Equal rental payments are due on January 1 of each year, beginning in 2017. 3. The fair value of...
On January 1, 2017, Sunland Company leased equipment to Flynn
Corporation. The following information pertains to this
lease:
1.
The term of the non-cancelable lease is 6 years. At the end of
the lease term, Flynn has the option to purchase the equipment for
$2,000, while the expected residual value at the end of the lease
is $5,000.
2.
Equal rental payments are due on January 1 of each year,
beginning in 2017.
3.
The fair value of the equipment...
On January 1, 2020, Pharoah Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $1,000, while the expected residual value at the end of the lease is $9,000. 2. Equal rental payments are due on January 1 of each year, beginning in 2020. 3. The fair value of the equipment...
Cullumber, Inc. leased equipment from Tower Company under a 4-year lease requiring equal annual payments of $354152, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4 year useful life and no salvage value. Cullumber, Inc.’s incremental borrowing rate is 11% and the rate implicit in the lease (which is known by Cullumber, Inc.) is 9%. Assuming that this lease is properly classified as...