Option #1: Lease Complete the following questions. In addition to answering the items below, you must...
Assume that the following facts pertain to a non-cancelable
lease agreement between Coco Inc. and Bubs Corp, a Lessee.
Inception date
January 1, 2018
Residual value of equipment at end of lease term,
unguaranteed
$100,000
Lease term
6 years
Economic life of leased equipment
8 years
Fair value of asset at January 1, 2017
$800,000
Lessor’s implicit rate
12%
Lessee’s incremental borrowing rate
10%
The lessee assumes responsibility for all executory costs, which
are expected to amount to $4,000 per...
Journal Entries
Amort Effective Interest
Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and write an analysis directed toward the team at BAJA Corporation describing what the numbers mean and how they relate to the business. Submit journal entries in the Excel file included in the module section and written segments in an MS Word document. For written answers, please make sure your responses are...
Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and write an analysis directed toward the team at BAJA Corporation describing what the numbers mean and how they relate to the business. Submit journal entries in the Excel file included in the module section and written segments in an MS Word document. For written answers, please make sure your responses are well-written, formatted per CSU-Global Guide...
Journal Entries
Amortization Schedule Straight-Line
Amortization Effective Interest
Option #1: Investments in Debt Securities Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and write an analysis directed toward the team at BAJA Corporation describing what the numbers mean and how they relate to the business. Submit journal entries in the Excel file included in the module section and written segments in an MS Word document....
The following facts pertain to a noncancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date Lease term Economic life of leased equipment Residual value at the end of lease term Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, beginning with October 1, 2017 October 1, 2017 6 years 7 years $0 8.50% $65,000 The collectability of the lease payments is probable by the lessor. The...
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Kingbird Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $74,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset...
Part 1) Amortization schedule
Part 2) Prepare all of the journal entries for the lessee for
2017 and 2018 to record the lease agreement, the lease payments,
and all expenses related to this lease. Assume the lessee’s annual
accounting period ends on December 31 and reversing entries are
used when appropriate. All executory costs are paid as incurred.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry"...
A finance lease agreement calls for quarterly lease payments of $7,392 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 12%. Both the present value of the lease payments and the cost of the asset to the lessor are $176,000. Required: a. Prepare a partial amortization table up to the October 1 payment. b. What would be the amount of interest expense (revenue) the lessee (lessor) would...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. January 1, 2020 $137,171 $54,000 $500,000 Commencement of Lease Date Annual lease payment due at the beginning of the year beginning with January 1, 2020 Residual value of equipment at end of lease term, guaranteed by lessee Book Value of Lease Equipment on LESSOR books Lease term Economic life of leased equipment...
1. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL) The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee. Commencement of Lease Date January 1, 2020 Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171 Residual value of equipment at end of lease term, guaranteed by lessee $54,000 Book Value of Lease Equipment on LESSOR books $500,000 Lease term 6 years Economic life of...