Assignment 10

Problem 1 At the beginning of the current year, an entity leased an equipment from a lessor with the following pertinent information: 1,000,000 400,000 300,000 100,000 700,000 200,000 500,000 5 years 8 years 10% Annual rental payable at the end of each year Initial direct cost paid Lease bonus paid to lessor before commencement of the lease Lease incentive received Discounted amount of restoring building as required by contract Leasehold improvement Purchase option that is reasonably certain to be exercised Lease term Useful life of building Implicit interest rate Incremental borrowing rate 12% What is the initial lease liability? Select the correct response: 4,290,000

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What is the total cost of a 36 month lease with the terms ?

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Exhibit Leased assets have an expected life of 5 years Depreciation is straight line Annual leasee payment is $1,400 Interest rate is 12% 1) Find the present value of the stream of leease payments in Exhibit. This is the Beginning-Year Liability

Exhibit Leased assets have an expected life of 5 years Depreciation is straight line Annual leasee payment is $1,400 Interest rate is 12% Find the depreciation of an asset with an expected life of 5 years and a value equal to the present value of the lease payments in Exhibit.

Exercise 5.1:Python Company leased equipment from Hope Leasing on January 1, 2018. Hope purchased the equipment at a cost of OMR 58,684.Other information:Lease term   4 yearSemiannual payments  OMR 10,000 on January 1, June 30Life of asset  4 yearsFair value of asset  OMR 58,684Implicit interest rate   10 % Incremental rate  10 %There is no expected residual value.Required:Prepare appropriate journal entries for the lessee, and lessor Company, for 2018. Assume straight-line depreciation and a December 31 year-end.

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Purchase cost of equipment Annual operating costs Immediate deposit Multiple Choice O Annual lease payments Salvage value (5 years from now) Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. If the company chooses the lease option, it will have to pay an immediate deposit of $25,000 to cover any future damages to the equipment. The deposit is refundable at the end of the lease term. The annual lease payments are made at the end of each year. Based on a net present value analysis with a discount rate of 22%, what is the financial advantage (disadvantage) of buying the equipment rather than leasing it? O O $(6,272) $(5,442) $(2,462) Lease $(4,952) $ 25,000 $ 18,000 Buy $ 60,000 $6,000 $ 12,000

Appendix One (Construct or lease)Objective: Should WLW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 360,000Taxes, insurance, and repairs (per year) $ 34,000Intended years of use 20Projected market value in 20 years $ 1,600,000Maximum down payment WLW can make $ 500,000Remainder in four payments of; $ 160,000Revenue opportunityBuilding annex will be leased to a tenant and will generate a lease revenue (per year) for 10 years $60,000Option 2: Lease Intended years of use 20First lease payment due now $ 90,000Rest of the lease payments (years 2-20) $ 90,000Operating costs to be paid by WLWRepairs (annual) $ 9,000Maintenance (annual) $ 26,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return 15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the…

Exhibit Leased assets have an expected life of 5 years Depreciation is straight line Annual lease payment is $1,400 Interest rate is 12% 3) Find the total expense in Year 1 if exhibit refers to an Operating Lease 4) Find the total expensee in Year 1 if exhibit refers to a Capital Lease

H1. Account 8% rate of return with annual rental payment of 81419

Date of entering lease 1 July 2019 Duration of lease 5 years Life of asset 6 years Unguaranteed residual value $40,000 Lease payments inception (at the start) $60,000 Annual payments (5) $65,000 Implied rate 11.0 %   Required: Determine the Fair Value (rounded off) of the leased asset.

Sub: financial accounting 8.7. Need Answer

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Homework 1 of Chapter 15. Q1. Python Company leased equipment from Hope Leasing on January 1, 2020. Hope recently purchased the equipment at a cost of $222,664. Other information: Lease term Annual payments Life of asset Fair value of asset 3 years $80,000 on January 1 each year 3 уears $222,664 8% 8% Implicit interest rate Incremental rate There is no expected residual value. Required: 1) Show how Hope determined the $80,000 annual lease payments. Fair Value: 3 aaa, o loH - Present Valuee 2) Prepare appropriate journal entries for Hope for 2020 and 2021. Round your answers to the nearest whole dollar amounts. Prepare an amortization schedule for Hope. Outstanding Balance (lease receivable) 222. tolo4 Effective Interest Revenue Decrease in Balance Date Cash Payments 1/1/2020 1/1/2020 12/31/2020 12/31/2021 80.000 80.000 $0.000 gross lease investment

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Please use Excel Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022.Other information:Lease term                       3 yearsAnnual payments             $40,000 on January 1 each yearLife of asset                      3 yearsImplicit interest rate          8%There is no expected residual value.Required: 1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as thepresent value of future lease payments. Explain how you compute this PV. 2. Prepare appropriate journal entries for Broncos for 2022. Assume straight-line amortizationand a December 31 year-end. Round your answers to the nearest whole dollar amounts. January 1, 2022: December 31, 2022:

needed: lease liabilityright of use of assetdepreciation expenseplease use a table for explaining lease liab.

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