At the beginning of current year, Arianne Company sold Próblem 15-12 (IFRS) machine and immediately leased it back. 5,000.000 6,000,000 500,000 Sale price at fair value Carrying amount of machine Annual rental payable at the end of each year Lease term Remaining life of machine Implicit interest rate PV of an ordinary annuity of 1 at 6% for 5 perioda 5year 20 years 421

At the beginning of current year, Arianne Company sold Próblem 15-12 (IFRS) machine and immediately leased it back. 5,000.000 6,000,000 500,000 Sale price at fair value Carrying amount of machine Annual rental payable at the end of each year Lease term Remaining life of machine Implicit interest rate PV of an ordinary annuity of 1 at 6% for 5 perioda 5year 20 years 421

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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On January 1, Lessee Company leases equipment with a useful life of 5 years for a 6-year lease term. Payments of $88,000 are due at the beginning of each year. The incremental borrowing rate is 4%. The present value of the payments is $407,440. Which of the following is true? Interest expense at the end of the first year is $407,440 x .04 Amortization expense at the end of the first year is $407,440 divided by 6. Lease expense at the end of the first year is $88,000. Interest expense at the end of the first year is $319,440 x .04
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
On December 31, 2020, Brick Co. leases Equipment to House, Inc. Annual Lease Payments made at beginning of Lease year $159,000 Implicit rate Guaranteed Residual Value Expected Residual Value Present value of an annuity due (7%,5) Present value of an ordinary annuity (7%,5) Present value of a single sum (7%,5) 7% $155,500 $56,500 4.38721 4.10020 0.71299 What journal entry would House, Inc. make at December 31, 2020 to record the lease assuming this is a finance lease? O DR Right of Use Asset $768,152; CR Lease Liability $768,152 O DR Right of Use Asset $808,426; CR Lease Liability $808,436 O DR Right of Use Asset $737,850; CR Lease Liability $737,850 O DR Right of Use Asset $626,980; CR Lease Liability $626,980
Eastern Edison Company leased equipment from Low-Tech Leasing on January 1, 2018. Low-Tech recently purchased the equipment at a cost of $366,951. Other information: 5 years $88,000 on January 1 each year 5 years Lease term Annual payments Life of asset Fair value of asset $366,951 Implicit interest rate 10% Incrementa1 rate 10% There is no expected residual value. Required: Prepare appropriate journal entries for Low-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet 1 2 3 Record the entry at the inception of the lease. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018
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Integrity Company sold to AAA Company machinery costing P800,000 with accumulated depreciation of P200,000 for P500,000 which is also its fair value on January 1, 2021. Integrity immediately leaseback the machine for 5 years for an annual rental of P50,000 payable at the end of each lease year with the first payment on December 31, 2021. The implicit interest rate is 6%. %. (Round off the PV factor to two decimal places, then do not round off during the computation)What is the amount capitalized as rights-of- use machinery at the date of sale-leaseback? a. P500,000 b. P300,000 c. P252,600 d. P210,500
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North Blue Company leased a new copier from Kixko Company on June 1, 2019, under a lease with the following information: Lease term 10 years Annual rental payable at the beginning of each lease year $45,000 Useful Life of machine 10 years Implicit interest rate 12% Present value factor for an annuity of 1 in advance for 10 periods at 12% 6.3282 Present Value factor for 1 for 10 periods at 12% 0.32197 North Blue has the option to purchase a machine on June 1, 2023, by paying $75,000, which approximates the fair value of the machine on the option exercise date. On May 1, 2019, North Blue should record a right-of-use asset in the amount of a.$284,769. b.$292,991. c.$450,000. d.$276,548.
On January 1, 2020, A Company sold a building to B Company with a carrying amount of P4,200,000 for P5,500,000 and immediately leased it back. The building had a fair value of P4,700,000 at the date of sale, and had a remaining useful life of 10 years. Additional information on the lease is as follows: Lease term 5 years P500,000 Annuity made in advance 10% Implicit rate USE PV FACTORS ROUNDED TO 4 DECIMALS. ROUND FINAL ANSWERS TO NEAREST PESO. Determine total rent income recognized by B Company in 2020.
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $94,500. Other information: 3 years $49,000 on January 1 each year 3 years $136, 382 Lease term Annual payments Life of asset Fair value of asset Implicit interest rate 8% Incremental rate 8% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet 2 3 > Record the lease. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018
In Intermediate Accounting by Whalen on Cengage, chapter 20, homework question 4, how do you calculate the selling price? Sale type lease for 8 years. Lease pmt due at the end of the year $32,000/yr. 14% interest. Cost of the equipment is $110,000 and estimate fair value at the end of the lease is $20,000.