Caleb's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2020 annual report (in millions). Operating Leases 2021 $48,848 2022 50,490 2023 50,130 2024 49,364 2025 48,174 Thereafter Total 585,336 $832,342 What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%.
Q: On September 1, 2024, Custom Shirts Incorporated entered into a lease agreement appropriately…
A: A lease agreement may be classified as an operating lease or capital lease from a lessor's point of…
Q: December 31, with the first payment on June 30, 2024. Geo calculate lease payment amounts.…
A: Lease:A lease is a written agreement where one party allows the another party to use his/her assets…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $10,000 over…
A: An agreement of contract that is prepared to transfer the right to use the resources for a…
Q: A finance lease agreement calls for quarterly lease payments of $7,728 over a 10-year lease term,…
A: a.DateLease paymentEffective interestDecrease in balanceOutstanding balanceJuly 1 184,000July…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $26,269 over…
A: Amortization schedule refers to a statement showing the interest charged, principal payment,…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $25,000 over…
A: A lease is a binding agreement between two parties, one party sells the right to use the asset to…
Q: Each of the four independent situations below describes a sales-type lease in which annual lease…
A: Lease is defined a contractual agreement incorporated between two business entities where one entity…
Q: On June 1, 2024, First National leased a building. The lease agreement calls for First National to…
A: Monthly interest rate = 7%/12 = 0.58333333% Number of months = 12 x 2 = 24
Q: 1. Computing the Annual Lease Payments On January 1, 2020, Alpha Inc. leased equipment to Omega…
A: Annual payment can be calculated using the formula of the present value of annuity due. Present…
Q: Each of the independent situations below describes a finance lease in which annual lease payments…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: A Type A lease agreement calls for quarterly lease payments of $5,376 over a 10-year lease term,…
A: Compute the outstanding balance:
Q: A finance lease agreement calls for quarterly lease payments of $5,133 over a 15-year lease term,…
A: A lease is an integrated contract between two business entities whereby one entity lends another…
Q: due immediately. Assuming an incremental borrowing rate of 6%, what is the lease liability on…
A: The lease agreement is entered into on 31st Dec 2020. The lease liability at the inception of lease…
Q: Signs a lease agreenient daled pany begiming lualy 1, • The lease is noncancelable and has a term of…
A: Journal entries refer to the systematic documentation of the financial transactions of a company in…
Q: Assume Fortune Brands, Inc., reports the following footnote relating to its leased facilities in its…
A: year cash flow i.e Minimum rental payment (A)Discounting factor (df)@7%(B)Present value =…
Q: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount…
A: Lease payments are regular payments made in line with a contract between the lessor, who owns the…
Q: A) Compute the present value of operating lease obligations using an 8% discount rate for Jarir Inc.…
A: In an operating lease, the assets can be used by the lessee without actually taking the ownership of…
Q: Cabela's Corp disclosed the following minimum rental commitments under non-cancelable operating…
A: In this problem, we are asked to compute the approximate present value of the minimum lease…
Q: Chicago leased machines from Brandon on December 31, 2021. The lease is a 10-year lease with annual…
A: Given:Lease is of 10 years with annual payment of $158000Present value of the lease is…
Q: On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing…
A: Semiannual lease payment = $464,149Total semiannual payments = 4*2 = 8Incremental borrowing rate =…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $30,000 over…
A: An organization that signs a lease gets the usage rights over an asset without really owning it. The…
Q: On June 1, 2024, First National leased a building. The lease agreement calls for First National to…
A: Lease: It implies to a contract where by one party (lessor) agrees to grant the right of using an…
Q: Domebo Corporation has entered into a 8 year lease for a piece of equipment. The annual payment…
A: When payments are to be made at the beginning of each period, then it is called as Annuity Due…
Q: On January 2, 2025, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual…
A: A lease is a contract in which a landlord (the lessor) offers the tenant (the lessee) the right to…
Q: On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing…
A: Leasing equipment offers businesses financial flexibility by allowing them to use assets without…
Q: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to…
A: Lease is form of a contractual agreement between two parties where lessor (owner of the asset)…
Q: On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing…
A: Present value of lease payments = Annual lease payments * PVAD of 1 at I for n periodsPretax amount…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $50,000 over…
A: An agreement of contract that is prepared to transfer the right to use the resources for a…
Q: Organic Markets reports operating lease information in its 2016 annual report (in millions). You…
A: Economic liability represents the current value of all the future expected liabilities.
Q: Caleb's Corp disclosed the following minimum rental commitments under non-cancelable operating…
A: Operating lease refers to the contractual agreement between two parties where one party which is a…
Q: What is the approximate implicit rate of return on the capital leases? Select one: а. 9.1% b. 11.7%…
A: A lease is an agreement between two parties pertaining to the temporary use of an asset. The person…
Q: What is the PV of lease payment. Record the lease on June 30, year 1
A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period…
Q: Three different lease transactions are presented below for Crane Enterprises. Assume that all lease…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: On June 30, 2021, Fly-By-Night Airlines leased a jumbo jet from Boeing Corporation. The terms of the…
A: Lease is a financial arrangement in which one party agrees to let the other party use its asset in…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $26,269 over…
A: Lease is a agreement between lessor and lessee where lessor allows lessee to use assets in exchange…
Q: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to…
A: The present value of lease payments is the current value of all future lease payments discounted to…
Q: .) On January 1, 2022, Buxton Corp. signed a 6 year lease. Buxton Corp. will make payments of…
A: To calculate the interest expense for the year 2022 from the finance lease, we need to determine the…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $25,000 over…
A: The lease is an option where one party can take an asset for rent from another party and there is no…
Q: Use the following information for the next two items: With Corporation entered into a lease with…
A: Lease accounting: Lease accounting is an accounting system used to record the financial impact due…
Q: On January 1, 2020, Blaugh Company signed a long-term lease for an office building. The terms of the…
A: A lease is a written agreement between two parties. Party A grants Party B the right to use its…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $50,000 over…
A: Lease is an aggreement between lessor and lessee where lessor gives his assets to lessee for use in…
Q: A lease agreement that qualifies as a finance lease calls for annual lease payments of $36,000 over…
A: Lease - It is an agreement between a lessor and a lessee and the lessor gives the lessee the right…
Q: June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The…
A: Lease Accounting -In a lease, one or more payments are made in exchange for the lessor agreeing to…
![Caleb's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2020 annual report (in millions).
Operating
Leases
2021
$48,848
2022
50,490
2023
50,130
2024
49,364
2025
48,174
Thereafter
Total
585,336
$832,342
What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3aff2365-9f44-4770-b8e3-e2ed0988bbf7%2Fca178c49-61c5-4f93-9a67-e73a54d242c0%2Ftfm4kd_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 1 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Caleb's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2020 annual report (in millions). Operating Leases 2021 $48,848 2022 50,490 2023 50,130 2024 49,364 2025 48,174 585,336 $832,342 Thereafter Total What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0%. Note: Round the remaining lease term to the nearest whole year, using the final lease payment provided as an estimate of annual future payments. Select one: a. $612,091 million О b. $747,426 million О c. $510,013 million О d. $620,847 million О e. $832,342 millionThe following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company and Skysong Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate May 1, 2020 $15,349.90 $6,000 50 10 $65,000 $76,000 4 years years 96 The collectibility of the lease payments by Sheridan is probable. Prepare a lease amortization schedule for Skysong for the 5-year lease termOn June 1, 2021, Florida National leased a building. The lease agreement calls for Florida National to make lease payments of $3,618.18 each month for the next two years, with the first lease payment beginning June 30. The company’s normal borrowing rate is 8%.Required:1. Calculate the present value of the lease payments. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel)2. Record the lease on June 1, 2021.
- On January 1, 2020, Mountain Inc. leases a machine used in its operations. The annual lease payment is $10,000 due on December 31 of 2020, 2021, and 2022. The fair value of the machine on January 1, 2020 is $26,730. The machine has no residual value. Mountain could borrow on a three-year collateralized loan at 6%. If the lease is accounted for as a finance lease, the total expenses related to this lease contract that Mountain Inc. will report in its income statement for the year ending December 31, 2020 is Select one: a. $10,600 b. $10,514 c. $10,717 d. $10,000On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from Builders, Incorporated The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $463,866 over a 4-year lease term (also the asset's useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 11.0%, the same rate Builders used to calculate lease payment amounts. Builders manufactured the equipment at a cost of $2.6 million. 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) Required: 1. Determine the price at which Builders is "selling" the equipment (present value of the lease payments) on June 30, 2024. 2. What amount related to the lease would Builders report in its balance sheet on December 31, 2024 (ignore taxes)? 3. What line item amounts related to the lease would Builders report in its income statement for the year ended…Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Lease term (years) Lessor's rate of return (known by lessee) Lessee's incremental borrowing rate Fair value of lease asset Situation 11 Situation 2 Situation 3 Lease Payments 10 11% 12% Right-of-use Asset/Lease Payable $780,000 Situation 20 9% 10% $1,150,000 3 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar. 6 12% 11% $365,000
- 19 On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $125,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,214,031 lease liability. Determine the interest rate implicit in the lease agreement. 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)On December 31, 2020, Roe Company leased a machine from Colt Company for a five-year period Equal annual payments under the lease P1,050,000 including P50,000 annual executory cost and are due on December 31 of each year. The first payment was made on December 31, 2020, and the second payment was made on December 31, 2021. The five lease payments are discounted at 10% over the lease term. The present value of minimum lease payments at the inception of the lease and before the first annual payment was P4,170.000.On December 31, 2021, what amount should be reported as lease liability?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
- In Note 11, of its 2018 financial statements, Chipotle (CMG) reported the following future operat- ing lease information: E5.12 Contractually required future minimum cash lease payments under existing operating leases as of December 31, 2018, are as follows: $ 294,191 296,579 294,941 295,290 2019 2020 . 2021 2022 290,980 2,478,397 2023 Thereafter. Total minimum lease payments $3,950,378 a. Assuming a discount rate of 5 percent, estimate the unrecognized asset and liability for assets acquired under operating leases for CMG at December 31, 2018. b. Given the estimated unrecognized liability calculated in part a., what impact does including this amount have on the liabilities of CMG reported on the balance sheet?On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $576,798 over a five-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 12%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $4.5 million. (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:1. Determine the present value of the lease payments at June 30, 2021 that Georgia-Atlantic uses to record the right-of-use asset and lease liability.2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2021?3. What pretax amounts related to the lease would…A finance lease agreement calls for quarterly lease payments of $5,376 over a 10-year lease term, with the first payment on July 1, the beginning of the lease. The annual interest rate is 8%. Both the present value of the lease payments and the cost of the asset to the lessor are $150,000. Required: Prepare a partial amortization table up to the October 1 payment. What would be the amount of interest expense (revenue) the lessee (lessor) would record in conjunction with the second quarterly payment on October 1?
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)