U PortalAssignments: Corp Fin ReprtnxOQuestlon 21 - E&P Set #4 (Lea X(no subject)- ellse.patipewe@ xezto.mheducation.com/ext/map/index.html?_con=con&external_browser3D0&launchUrl=https%253A%252F%252Flms.mheducation.com%252F...4 (Leases) 6SavedHelpSave & ExitSubmitCheck my workExercise 15-3 (Static) Finance lease; lessee; balance sheet and income statement effects [L015-2]On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls forGeorgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term, payable each June 30 and December31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses to calculatelease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipmentis $3 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1 (Use approprilate factor(s) from the tablesprovided.)Required:1. Determine the present value of the lease payments at June 30, 2021 that Georgia-Atlantic uses to record the right-of-use asset andlease liability.2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2021?3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31,2021?(For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest wholedollar.)1.Present value2.Pretax amount for liabilityPretax amount for right-of-use asset3.Pretax amount for interest expensePretax amount for amortization expense

Following is that the calculation of Present value of minimum lease payments used to record right to…

Answered: 1, Georgia-Atlantic, Inc. leased war…

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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S Exercise 15-3 (Algo) Finance lease; lessee; balance sheet and income statement effects [LO15-2] On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $604,152 over a four-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $4.10 million. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What amount related to the lease would Georgia-Atlantic report in…
How do they find the irr?
P20.1 (LO 2, 4) (Lessee Entries, Finance Lease) The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2025 Lessor's implicit rate Lessee's incremental borrowing rate January 1, 2025 $113,864 $50,000 $45,000 6 years 6 years $600,000 8% 8% The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Instructions a. Prepare an amortization schedule that would be suitable for the lessee for the lease term. b. Prepare all of the journal entries for the lessee for 2025 and 2026 to record the lease agreement, the lease payments, and all…
The lessor expenses initial direct costs in the year of incurrence in a(n) direct-financing lease. sales-type lease. direct-financing lease and a sales-type lease. operating lease.
t27 In IFRS 16 par. 74, initial direct costs incurred by a lessor in consummating a manufacturer’s or dealer’s lease areA. charged to unearned income in the first period of the lease term.B. charged to expense in the first period of the lease term.C. deferred and allocated over the lease term in proportion to the recognition of rent revenue.D. deferred and allocated over the lease term on a straight-line basis.
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Airway Leasing entered into an agreement to lease aircraft to Ouachita Airlines. Consider each of the following, a–e, to be independent scenarios. a. The agreement calls for ownership of the aircraft to be transferred to Ouachita Airlines at the end of the lease term. b. The fair value of the aircraft is expected to be $500,000 at the end of the lease term. Ouachita has the option to purchase the aircraft at the end of the lease term for $90,000. c. The aircraft has a useful life of 20 years, and the term of the lease is 14 years. d. The present value of the lease payments is $8,900,000 and the fair value of the leased aircraft is $10,000,000. e. The aircraft was manufactured to meet specifications provided by Ouachita to optimize the exclusively regional nature of its flights. Required: 1. In each scenario, indicate whether Ouachita would classify the lease as an operating lease or capital lease under U.S. GAAP. Assume the lease agreement has not met any of the other criteria of a…
Leases-cemara Lessor-cermai bhd Question 6 Cemara Bhd sells and leases out a plant. On 1 January 2019, Cemara Bhd entered into a three year non-cancellable lease with Cermai Bhd on the following terms: Lease rental is RM28,000, payable annually in advance. W. The initial direct costs of RM4,200 incurred in commission and legal fees are to borne by Cemara Bhd and charged to the Statement of Profit or Loss on a systematic basis. The interest rate implicit in the lease with Cermai Bhd is 18%. There is a guaranteed residual value of RM14,000 by Cermai Bhd. The fair value of the machine is RM80,358. Iv. V. Required: a) Prepare the related journal entries for the year 2019 for Cemara Bhd. b) Prepare the extract of Cemara Bhd's Statement of Profit and Loss and Other Comprehensive Income for the year ended 31 December 2019, 2020 and 2021. c) Prepare the extract of Cemara Bhd's Statement of Financial Position as at 31 December 2019, 2020 and 2021. (include the notes to the financial statement…
Long-term financing leases currently: Multiple Choice О show up on the balance sheet. О appear on the company's income statement. do not appear on any financial statements. О appear in the footnotes to the annual report.
Part 1: New Lease Accounting – IFRS 16 Leases Effect Analysis. What are the top three industries most affected by IFRS 16 as measured by the present value of future payments for off-balance-sheet leases to total assets? Which leased assets propel them to the top three? Also, discuss the extent that smaller firms would be affected by IFRS 16. Which payments are to be included in the measurement of lease assets and lease liabilities? Also, discuss the pros and cons of excluding the following payments from the measurement. Variable lease payments linked to future use or sales Optional payments relating to lease-extension option when a lessee is not reasonably certain to exercise the option. Discuss the effects of the new accounting on the following items and ratios of lessees. Provide reason(s) behind all effects. EBITDA, operating profit, and profit before tax Operating cash flow, financing cash flow, and total cash flow Debt to equity, current ratio, and return on total assets
Exercise 15-33 (Algo) Nonlease payments; lessor and lessee [LO15-2, 15-7] On January 1, 2024, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 11% rate of return for providing long-term financing. The lease agreement specified the following: Ten annual payments of $61,000 beginning January 1, 2024, the beginning of the lease and each December 31 thereafter through 2032. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $346,464. The lease qualifies as a finance lease/sales-type lease. A 10-year service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $8,000 per year are specified, beginning January 1, 2024. NRC was to pay this cost as incurred, but lease payments reflect this expenditure. A partial amortization schedule, appropriate for both the lessee and lessor, follows: Note: Use…

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1, Georgia-Atlantic, Inc. leased war nlce semiannual lease paymer