Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased theequipment at a cost of $1,400,000. Chance elected the short-term lease option. Appropriate adjusting entries are madeannually.Related Information:1 year (4 quarterly periods)$56,000 at Jan. 1, 2018, and at Mar. 31, June 30, and Sept. 30.5 yearsLease termQuarterly lease paymentaEconomic life of assetInterest rate charged by the lessorRequired:Prepare appropriate entries for Chance from the beginning of the lease through December 31, 2018. (If no entry isrequired for a transaction/event, select "No journal entry required" in the first account field. Round your answers tothe nearest whole dollar amount.)

Journal entry refers to the process of recording commercial transactions for the first time in the…

ance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third B quipment at a cost of $1,400,000. Chance elected the short-term lease option. Appropriat- anually. lated Information: ase term sarterly lease payments conomic life of anset nterest rate charged by the lessor 1 year (4 quarterly periods) $56,000 at Jan. 1, 2018, and at Mar. 31 5 years tequired: Prepare appropriate entries for Chance from the beginning of the lease through December

ance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third B quipment at a cost of $1,400,000. Chance elected the short-term lease option. Appropriat- anually. lated Information: ase term sarterly lease payments conomic life of anset nterest rate charged by the lessor 1 year (4 quarterly periods) $56,000 at Jan. 1, 2018, and at Mar. 31 5 years tequired: Prepare appropriate entries for Chance from the beginning of the lease through December

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hy Marx Co. recorded a right-of-use asset of $600,000 in a 10-year operating lease. Lease payments are made annually at January 1 of each year beginning January 1, 2021. The interest rate charged by the lessor was 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:Prepare the appropriate journal entries on January 1, 2021, and December 31, 2021. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.)
On 1 January 2012, an IFl entered into an ljarah Muntahia Bittamleek contract with a customer. The asset was purchased lease term, the asset shal be transferred as a gitt. The terms of the contract are Annual rentals $110,000 Term of lease= 4 years Residual value of asset at end= $3,000 Cost of the asset= $380,000 What shall be the accounting entries in the books of IF for the years 2012 to 2015?
Prepare a lease amortization schedule for Larkspur for the 5-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) LARKSPUR LEASING COMPANY (Lessor) Lease Amortization Schedule Date 5/1/20 5/1/20 5/1/21 5/1/22 5/1/23 5/1/24 4/30/25 Annual Lease Payment Plus BPO $ 14 15852.19 15852.19 15852.19 15852.19 15852.19 5000 63409 Interest on Lease Receivable 5736.26 i 4623.51 3388.35 2017.33 495,50 13748 LA Recovery of Lease Receivable 15852.19 10115.93 11228.68 12463.84 13834.86 4504.50 49661 OF
On January 1, 2024, Lesco Leasing leased equipment to Quality Services under a finance/sales-type lease designed to earn Lesco a 14% rate of return for providing long-term financing. The lease agreement specified: 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). a. Ten annual payments of $59,000 beginning January 1, 2024, the beginning of the lease and each December 31 thereafter through 2032. b. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to Lesco was $321,104. c. The lease qualifies as a finance lease/sales-type lease. d. A 10-year service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $5,000 per year are specified, beginning January 1, 2024. Lesco was to pay this cost as incurred, but lease payments reflect this expenditure. Also included in the $59,000 payments is an insurance premium…
Hanshaben
ok nt ences A finance lease agreement calls for quarterly lease payments of $7,056 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 $168,000. 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 record in conjunction with the second quarterly payment on October 1? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a partial amortization table up to the October 1 payment. Note: Enter all amounts as positive values. Round your answers to the nearest whole dollar. Date July 1 July 1 October 1 Lease Payment Effective Interest Decrease in Outstanding balance balance Required B >
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $92,000. Manufacturers Southern's fiscal year ends December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $18,000 at the beginning of each period Economic life of asset 2 years Fair value of asset $134,496 Implicit interest rate 8% Required:1. Show how International Machines determined the $18,000 quarterly lease payments.2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee. Commencement date January 1, 2020 Annual lease payment due at the beginning of each year, beginning with January 1, 2020 $113,864 Residual value of equipment at end of lease term, guaranteed by the lessee $50,000 Expected residual value of equipment at end of lease term $45,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, 2020 $600,000 Lessor's implicit rate 8% Lessee's incremental borrowing rate 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 2020 and 2021 to record the lease agreement, the lease…
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $250,177. Manufacturers Southern elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information: Lease term 1 years (4 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2016, and at Mar. 31, June 30, Sept. 30 Economic life of asset 5 years Interest rate charged by the lessor 8% Required: 1. Prepare appropriate entries for Manufacturers Southern from the beginning of the lease through December 31, 2016.
On January 1, 20x1, Chantaly Bars Co. leased equipment to NJA Inc.Information on the lease is shown below:Cost of equipment ₱ 2,400,000Useful life of equipment 5 yearsLease term 4 yearsAnnual rent payable at the start of each year 800,000Interest rate implicit in the lease 10%Initial direct costs amounted to Php 160,000. The lease qualifies forsales type lease accounting. (Please only answer the highlighted questions) a. How much is the gross investment in the lease and the net investment in the lease on January 1, 20x1?b. How much is the total interest income (finance income) to berecognized by Chantaly Bars over the lease term?c. How much is the gross profit from the sale?d. How much is the net profit from the sale?
please and thank you
machine to Lessee Company. The machine had an original At the beginning of current year, Lessor Company leased a cost of P6,000,000. The lease term was five years and the The lease is properly classified as a direct financing lease. 11 / 19 66.7% Problem 13-7 (IAA) implicit interest rate on the lease was 15%. The annual lease payments of P1,750,000 are made e December 31. The machine reverts to Lessor at the end of the lease term, which time the residual value of the machine will P275,000. The residual value is unguaranteed. 1. At the commencement of the lease, what would be the net lease receivable on the part of the lessor? a. 6,275,000 ь. 8,750,000 c. 6,000,000 d. 5,725,000 2. What is the gross investment in the lease? a. 8,750,000 b. 9,025,000 c. 6,000,000 d. 8,475,000 3. What is the total unearned interest income? a. 3,025,000 b. 2,750,000 c. 2,475,000 d. 6,000,000 4. What is the interest income for the current year? a. 1,312,500 b. 1,353,750 900,000 d. C. 450,000 Doc