At the beginning of current year, an entity sold an equipment with remaining life of 10 years and immediately leased it back for 4 years at the prevailing market rental. Annual rental payable at the end of each year Problem 15-13 (IFRS) Sale price at fair value Carrying amount of equipment 6,000,000 4,500,000 800,000 10% Implicit interest rate Present value of an ordinary nnuity of 1 at 10% for four periods 3.17 1. What is the initial lease liability?

At the beginning of current year, an entity sold an equipment with remaining life of 10 years and immediately leased it back for 4 years at the prevailing market rental. Annual rental payable at the end of each year Problem 15-13 (IFRS) Sale price at fair value Carrying amount of equipment 6,000,000 4,500,000 800,000 10% Implicit interest rate Present value of an ordinary nnuity of 1 at 10% for four periods 3.17 1. What is the initial lease liability?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 6P: Sales-Type Lease with Unguaranteed Residual Value Lessor Company and Lessee Company enter into a...

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back for 4 yearn at the prevailling market rental. with remaining life of 10 years and immedintely leased it tthe beginning of current yeT, A entity wd an equipment Present value of an ordinary nnuity of Annual rental pxyable at the end ofeschyear for 4 yearst the prevailing market rental. Sale price at fair value Carrying amount of equipment enual rental payable at the end of each vear 6,000,000 4.500,000 800,000 10% Implicit interest rate Lat 10% for four periods 317 1 What is the initial lease liability? a 2,536,000 b. 3,200,000 c. 3,000,000 d. 2 What is the cost of right of use asset? a 1,902,000 b. 2,598,000 c. 2,536,000 d. 3. Whta is the gain on right transferred" 866.000 b. 634.000 760.000 1 What ia the annual depreciarion of the lesere 475,500 134,000
On 1.1 2016 YZ company leased Equipment from ABC company, the fair value of Equipment OMR680496 and useful life of it 5 years without residual value, the lessee paid rental payments of OMR123000 at the beginning of each year. The lessee's incremental borrowing rate 12%. The balance on 1/1/2016 should be: Select one: a. OMR373594 O b. OMR123000 c. None of the options d. OMR474245
At the beginning of current year, Denver Company sold an equipment with remaining life of 10 years and immediately leased it back for 4 years at the prevailing market rental.Sale price at fair value: 6,000,000Carrying amount of equipment: 4,500,000Annual rental payable at the end of each year: 800,000Implicit interest rate: 10%Present value of an ordinary annuity of 1 at 10% for four periods: 3.17 What is the net annual rental income of the buyer-lessor? 600,000400,000800,000200,000
At the beginning of current year, Denver Company sold an equipment with remaining life of 10 years and immediately leased it back for 4 years at the prevailing market rental.Sale price at fair value: 6,000,000Carrying amount of equipment: 4,500,000Annual rental payable at the end of each year: 800,000Implicit interest rate: 10%Present value of an ordinary annuity of 1 at 10% for four periods: 3.17 What amount should be reported as initial lease liability? 3,000,0002,536,00003,200,000 What is the cost of right of use asset? 2,598,00001,902,0002,536,000
At the beginning of current year, Denver Company sold an equipment with remaining life of 10 years and immediately leased it back for 4 years at the prevailing market rental.Sale price at fair value: 6,000,000Carrying amount of equipment: 4,500,000Annual rental payable at the end of each year: 800,000Implicit interest rate: 10%Present value of an ordinary annuity of 1 at 10% for four periods: 3.17 What amount should be reported as gain on right transferred to the buyer-lessor? 866,0000750,000634,000 What amount should be reported as annual depreciation of the right of u 634,000475,500190,200253,600
On 1.1 2016 YZ company leased Equipment from ABC company, the fair value of Equipment OMR680496 and useful life of it 5 years without residual value, the lessee paid rental payments of OMR123000 at the beginning of each year. The lessee's incremental borrowing rate 12%. The interest expense on 13/12/2016 should be: Select one: a. OMR 44831 O b. OMR44351 c. OMR 35451 O d. None of the options
Seventeen Company is a dealer in machinery. At the beginning of current year, a machinery was leased to another entity with the following provisions: Annual rental payable at the end of each year Lease term and useful life of machinery Cost of machinery Residual value-unguaranteed Implicit interest rate PV of an ordinary annuity of 1 for 5 periods at 12% PV of 1 for 5 years at 12% 3,000,000 5 years 8,000,000 1,000,000 12% 3.60 0.57 At the end of the 5-year lease term, the machinery will revert to Seventeen. Seventeen incurred initial direct cost of P300,000 in finalizing the lease agreement. 1. What amount should be reported as total unearned interest income? a. 4,630,000 b. 4,200,000 c. 5,200,000 d. 3,630,000 2. What amount should be reported as gross income on sale? a. 7,700,000 b. 3,070,000 c. 2,500,000 d. 3,370,000 3. What amount should be reported as interest income for current year? a. 1,364,400 b. 1,296,000 C 1,800,000 d. 926,000
Bitag is a dealer in machinery. On January 1, 2023, a machinery was leased toanother entity with the following provisions: Annual rental payable at the end of each year 2,000,000Lease term and useful life of machinery 5 yearsCost of machinery 6,000,000Residual value – guaranteed 1,000,000Implicit interest rate 12%PV of an ordinary annuity of 1 for 5 periods at 12% 3.60PV of 1 for 5 periods at 12% 0.57 There is no transfer of title nor bargain purchase option. What amount of cost of goods sold should be reported? 5,430,0006,000,0007,000,0007,200,000
At the beginning of current year, an entity sold building with remaining useful life of 25 years and immediately leased it back for 5 years. Sale price at fair value 20,000,000 Carrying amount of building 24,000,000 Annual rental payable at the end of each year 1,000,000 Implicit interest rate 12% Present value of an ordinary annuity of 1 at 12% for 5 periods 3.60 What is the cost of right of use asset? What is annual depreciation of the right of use asset? What is the loss on right transferred? What amount of net rental income should be reported by the lessor?
At the beginning of current year, Panorama Company leased a building form a lessor with the following pertinent information Annual rental payable at the end of each year 1,000,000 Initial direct cost paid 400,000 Lease incentive received 100,000 Leasehold improvement 200,000 Purchase option that is reasonably certain to be exercised 500,000 Lease term 5 years Useful life of building 8 years Implicit interest rate 10% PV of an ordinary annuity of 1 for 5 periods at 10% 3.79 Present value of 1 for 5 periods at 10% 0.62 1. What is the cost of the right of use asset? a. 4,500,000 b. 4,400,000 c. 4,700,000 d. 4,600,000 2. What is the depreciation for current year? a. 880,000 b. 900,000 c. 550,000 d. 575,000 3. What is the interest expense for current year? a. 410,000 b. 379,000 c. 450,000 d. 429,000
At the beginnig of current year, East Company leased a new machine from North Company with the following information: Annual rental payable at beginning of each lease year 4000,000Lease Term 10 yearsUseful life of machine 12 yearsImplicit interest rate 14% Present value of an annuity of 1 in advance for 10 periods at 14% 5.95Present value of 1 for 10 periods at 14% 0.27 East company had the option to purchase the machine upon the expirtation of the lease term by paying P500,000. The purchase option is reasoably certain to be exercised. What amount should East Company…
mpany purchaseda Problem 10-32 (IFRS) under a finance At the beginning of current year, Southstar Company leased a building with the following information: ity were originally Annual rental payable at the end of each lease year Initial direct cost paid Lease incentive received Lease bonus paid to lessor before commencement of lease Present value of cost of restoring the building as required by contract discounted at 8% Purchase option that is reasonably certain Lease term Useful life of building Implicit inierest rate Present value of an ordinary annuity of 1 at 10% for 6 periods Present value of 1 at 10% for 6 periods 1,500,000 405,000 50,000 300,000 lated depreciation and the remaining 0,000. -P1,500,000 cash. 945,000 1,000,000 6 years 10 years 10% 4.36 0.56 of the machinery 1. What amount should be recorded initially as cost of right of use asset? a. 8,750,000 b. 8,700,000 c. 9,900,000 d. 7,755,000 2. What amount should be recorded as annual depreciation of the right of the asset?…