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BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 2021. Lease description: Quarterly rental payments Lease term No residual value; no BPO Economic life of machine Implicit interest rate Fair value of asset $16,427 at beginning of each period 5 years (20 quarters) C) $251,759. D) $360,344. 5 years 7% $280,000 What is the balance in the lease payable account after the April 1, 2021, lease payment? A) $275,387. B) $263,573. =) Blue Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $28,476 are made annually at the end of each year. The interest rate charged by the lessor was 7% and was

BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 2021. Lease description: Quarterly rental payments Lease term No residual value; no BPO Economic life of machine Implicit interest rate Fair value of asset $16,427 at beginning of each period 5 years (20 quarters) C) $251,759. D) $360,344. 5 years 7% $280,000 What is the balance in the lease payable account after the April 1, 2021, lease payment? A) $275,387. B) $263,573. =) Blue Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $28,476 are made annually at the end of each year. The interest rate charged by the lessor was 7% and was

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 2021. Lease description: Quarterly rental payments Lease term No residual value; no BPO Economic life of machine Implicit interest rate Fair value of asset What is the balance in the lease payable account after the April 1, 2021, lease payment? A) $275,387. B) $263,573. C) $251,759. D) $360,344. . 4) Blue Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $28,476 are made annually at the end of each year. The interest rate charged by the lessor was 7% and was known by Blue. The balance in the right-of-use asset after two years will be: A) $242,952. B) $170,035. C) $171,048. D) $200,000. $16,427 at beginning of each period 5 years (20 quarters) 15) Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments). No residual value; no purchase option. . 5 years 7% $280,000 . . Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million. What is the interest revenue that Technoid would report for this lease in its 2021 income statement? A) $1,673,820. B) SO. C) $876,662. D) None of these answer choices is correct.
Transcribed Image Text:BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 2021. Lease description: Quarterly rental payments Lease term No residual value; no BPO Economic life of machine Implicit interest rate Fair value of asset What is the balance in the lease payable account after the April 1, 2021, lease payment? A) $275,387. B) $263,573. C) $251,759. D) $360,344. . 4) Blue Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $28,476 are made annually at the end of each year. The interest rate charged by the lessor was 7% and was known by Blue. The balance in the right-of-use asset after two years will be: A) $242,952. B) $170,035. C) $171,048. D) $200,000. $16,427 at beginning of each period 5 years (20 quarters) 15) Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments). No residual value; no purchase option. . 5 years 7% $280,000 . . Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million. What is the interest revenue that Technoid would report for this lease in its 2021 income statement? A) $1,673,820. B) SO. C) $876,662. D) None of these answer choices is correct.
13) BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 1, 2021. Lease description: Quarterly rental payments Lease term No residual value; no BPO Economic life of machine Implicit interest rate Fair value of asset What is the balance in the lease payable account after the April 1, 2021, lease payment? A) $275,387. B) $263,573. C) $251,759. D) $360,344. . 14) Blue Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $28,476 are made annually at the end of each year. The interest rate charged by the lessor was 7% and was known by Blue. The balance in the right-of-use asset after two years will be: A) $242,952. B) $170,035. C) $171,048. D) $200,000. 15) Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million. . $16,427 at beginning of each period 5 years (20 quarters) . 5 years 7% $280,000 . . What is the interest revenue that Technoid would report for this lease in its 2021 income statement? A) $1,673,820. B) SO. C) $876,662. D) None of these answer choices is correct.
Transcribed Image Text:13) BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 1, 2021. Lease description: Quarterly rental payments Lease term No residual value; no BPO Economic life of machine Implicit interest rate Fair value of asset What is the balance in the lease payable account after the April 1, 2021, lease payment? A) $275,387. B) $263,573. C) $251,759. D) $360,344. . 14) Blue Co. recorded a right-of-use asset of $200,000 in a 10-year operating lease. Payments of $28,476 are made annually at the end of each year. The interest rate charged by the lessor was 7% and was known by Blue. The balance in the right-of-use asset after two years will be: A) $242,952. B) $170,035. C) $171,048. D) $200,000. 15) Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2021. The manufacturing cost of the computers was $12 million. This noncancelable lease had the following terms: Lease payments: $2,466,754 semiannually; first payment at January 1, 2021; remaining payments at June 30 and December 31 each year through June 30, 2025. Lease term: five years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: five years. Implicit interest rate and lessee's incremental borrowing rate: 5% semiannually. Fair value of the computers at January 1, 2021: $20 million. . $16,427 at beginning of each period 5 years (20 quarters) . 5 years 7% $280,000 . . What is the interest revenue that Technoid would report for this lease in its 2021 income statement? A) $1,673,820. B) SO. C) $876,662. D) None of these answer choices is correct.
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