Universal Leasing
leases electronic equipment to a variety of businesses. The
company’s primary service is providing alternate financing by
acquiring equipment and leasing it to customers under longterm
leases. Universal earns interest under these arrangements at a 10%
annual rate.
Universal purchased an electronic typesetting machine on December
31, 2017, for $90,000 and then leased it to Desktop, Inc., a local
publisher. The six-year operating lease term commenced January 1,
2018, and the lease contract specified annual payments of $8,000
beginning December 31, 2018 and each December 31 through 2023. The
machine’s estimated useful life is 15 years with no estimated
residual value.
The publisher had the option to terminate the lease after four
years. At the beginning of the lease, there was no reason to
believe the lease would be terminated.
Required:
1.
Prepare the appropriate entries for Universal Leasing from the
beginning of the lease through the end of 2018.
2. At the beginning of 2019, there was a
significant indication that Desktop’s economic incentive to
terminate the lease had changed causing both companies to believe
termination of the lease at the end of four years (three years
remaining) is “reasonably certain”. Prepare any appropriate entries
for Universal Leasing at January 1, 2019, to reflect the change in
the lease term.
3. Prepare the appropriate entries pertaining to
the lease for Universal Leasing at December 31, 2019.
Universal Leasing leases electronic equipment to a variety of businesses. The company’s primary service is providing alternate financing by acquiring equipment and leasing it to customers under longte...
Universal Leasing leases electronic equipment to a variety of businesses. The company’s primary service is providing alternate financing by acquiring equipment and leasing it to customers under longterm leases. Universal earns interest under these arrangements at a 10% annual rate. Universal purchased an electronic typesetting machine on December 31, 2017, for $106,000 and then leased it to Desktop, Inc., a local publisher. The six-year operating lease term commenced January 1, 2018, and the lease contract specified annual payments of $9,600...
Universal Leasing leases electronic equipment to a variety of businesses. The company's primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term leases. Universal earns interest under these arrangements at a 8% annual rate. Universal purchased an electronic typesetting machine on December 31, 2020, for $103,000 and then leased it to Desktop, Inc., a local publisher. The six-year operating lease term commenced January 1, 2021, and the lease contract specified annual payments of $9,300...
Universal Leasing leases electronic equipment to a variety of businesses. The company’s primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term sales-type leases. Universal earns interest under these arrangements at a 8% annual rate. The company leased an electronic typesetting machine it purchased for $38,000 to a local publisher, Desktop Inc. on December 31, 2017. The lease contract specified annual payments of $8,348 beginning January 1, 2018, the beginning of the lease,...
Universal Leasing leases electronic equipment to a variety of businesses. The company's primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term leases. Universal earns interest under these arrangements at a 12% annual rate. Universal purchased an electronic typesetting machine on December 31, 2020, for $98,000 and then leased it to Desktop, Inc., a local publisher. The six-year operating lease term commenced January 1, 2021, and the lease contract specified annual payments of $8,800...
Universal Leasing leases electronic equipment to a variety of businesses. The company’s primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term sales-type leases. Universal earns interest under these arrangements at a 11% annual rate. The company leased an electronic typesetting machine it purchased for $40,900 to a local publisher, Desktop Inc., on December 31, 2020. The lease contract specified annual payments of $8,959 beginning January 1, 2021, the beginning of the lease, and...
Universal Leasing leases electronic equipment to a variety of businesses. The company's primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term direct financing leases. Universal earns interest under these arrangements at a 10% annual rate. The company leased an electronic typesetting machine it purchased for $30,900 to a local publisher, Desktop Inc., on December 31, 2015. The lease contract specified annual payments of $8,000 beginning January 1, 2016, the inception of the lease,...
Universal Leasing leases electronic equipment to a variety of businesses. The company's primary service is pro- E 15-30 Purchase option: viding alenate financing by acquiring equipment and leasing it to customers under long-term sales-type leases. lessor; sales-type Universal eams interest under these arrangements al a 10% annual rate. lease; no selling The company leased an electronic typesetting machine it purchased for $30,900 to a local publisher, Desktop profit Inc. on December 31, 2017. The lease contract specified annual payments of...
Check my work Universal Leasing leases electronic equipment to a variety of businesses. The company's primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term sales-type leases. Universal earns interest under these arrangements at a 12% annual rate. The company leased an electronic typesetting machine it purchased for $44,900 to a local publisher, Desktop Inc., on December 31, 2020. The lease contract specified annual payments of $9,626 beginning January 1, 2021, the beginning of...
Branif Leasing leases mechanical equipment to industrial consumers under sales-type leases that earn Branif a 20% rate of return for providing long-term financing. A lease agreement with Branson Construction specified 20 annual payments beginning December 31, 2018, the beginning of the lease. The estimated useful life of the leased equipment is 20 years with no residual value. Its cost to Branif was $672,003. The lease qualifies as a finance lease to Branson. Maintenance of the equipment was contracted for through...
Branif Leasing leases mechanical equipment to industrial consumers under sales-type leases that earn Branif a 10% rate of return for providing long-term financing. A lease agreement with Branson Construction specified 20 annual payments beginning December 31, 2018, the beginning of the lease. The estimated useful life of the leased equipment is 20 years with no residual value. Its cost to Branif was $936,492. The lease qualifies as a finance lease to Branson. Maintenance of the equipment was contracted for through...