Assume that on December 31, 2019, Teal Mountain Aerospace signs a 8-year, non-cancelable lease agreement to lease a hanger fromAero Field Management Company. The following information pertains to this lease agreement:1.The agreement requires equal rental payments of $164,588 beginning on December 31, 2019.2. The fair value of the building on December 31, 2019 is $1,114,500.The building has an estimated economic life of 10 years, a guaranteed residual value of $49,600, and an expected residualvalue of $34,900. Teal Mountain depreciates similar buildings on the straight-line method.3.4.The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.5.Teal Mountain's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Teal Mountain. Right-of-Use Asset1175541Lease Liability1083384(To record the lease)ILease LiabilityCash(To record first lease payment)'20Amortization ExpenseRight-of-Use Asset

2019, Teal Mountain Aerospace signs a 8-year, non-cancelable lease agreement ro Field Management Company. The following information pertains to this lease agreement: The agreement requires equal rental payments of $164,588 beginning on December 31, 2019. The fair value of the building on December 31, 2019 is $1,114,500. 3. The building has an estimated economic life of 10 years, a guaranteed residual value of $49,600, and an e value of $34,900. Teal Mountain depreciates similar buildings on the straight-line method. 4. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

2019, Teal Mountain Aerospace signs a 8-year, non-cancelable lease agreement ro Field Management Company. The following information pertains to this lease agreement: The agreement requires equal rental payments of $164,588 beginning on December 31, 2019. The fair value of the building on December 31, 2019 is $1,114,500. 3. The building has an estimated economic life of 10 years, a guaranteed residual value of $49,600, and an e value of $34,900. Teal Mountain depreciates similar buildings on the straight-line method. 4. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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