Solution 1:
Crescent will recognized rental revenue of $24,000 each year for operating lease agreement.
Further depreciation to be charged by Crescent on equipment acquired.
Annual depreciation = Cost of equipment / Useful life = $162,000 / 13 = $12,462
Effect on earnings of Crescent = Rental revenue - Depreciation expense = $24,000 - $12,462 = $11,538
Solution 2:
Equipment balance (net) at the end of 2018 = Cost - Accumulated depreciation = $162000 - $12,462 = $149,538
Deferred lease revenue = Rental received in advance on 31.12.2021 for 2022 year = $24,000
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $29,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $216,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. Crescent records...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $24,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $162,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the...
At January 1, 2021, Café Med leased restaurant equipment from
Crescent Corporation under a nine-year lease agreement. The lease
agreement specifies annual payments of $34,000 beginning January 1,
2021, the beginning of the lease, and at each December 31
thereafter through 2028. The equipment was acquired recently by
Crescent at a cost of $261,000 (its fair value) and was expected to
have a useful life of 13 years with no salvage value at the end of
its life. (Because the...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $31,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $234,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. Crescent records...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $29,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $207,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. Crescent records...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $27,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $189,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $26,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $180,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. Crescent records...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $24,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $162,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $22,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $189,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $33,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $252,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the...