Carla Vista Corporation owns equipment that cost $94,400 and has a useful life of 8 years with no salvage value. On January 1, 2025,Carla Vista leases the equipment to Sandhill Inc. for one year for one rental payment of $17,700 on January 1.Assuming Sandhill (lessee) elects to use the short-term lease exception, prepare Sandhill's 2025 journal entry. (List debit entry beforecredit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required,select "No Entry" for the account titles and enter O for the amounts.)Account Titles and ExplanationDebitCredit

The objective of the question is to prepare the journal entry for Sandhill Inc. for the year 2025,…

Answered: Carla Vista Corporation owns equipment…

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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Pearl Co. leases equipment to Martinez Inc. on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 5 years with no renewal option, and the machinery has an estimated economic life of 6 years. 2. The cost of the machinery is $733,000, and the fair value of the asset on January 1, 2020, is $1,030,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $75,000. Martinezdepreciates all of its equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor. 6. Pearl desires a 9% rate of return on its investments. Martinez’s incremental borrowing rate is 11%. Pearl’s implicit rate is unknown to Martinez. Assume the…
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please show the calculations especially the wrong ones.
Ravis Rent-A-Car Company leases a car to Ira Reem, an employee, on January 1, 2019. The term of the noncancelable lease is 4 years. The following information about the lease is provided: 1. Title to the car passes to Ira on the termination of the lease with no additional payment required by the lessee. 2. The cost and fair value of the car is $8,400. The car has an economic life of 5 years. 3. The interest rate implicit in the lease is 10%. 4. It is probable that Ravis will collect the lease payments. 5. Equal annual lease payments are due at the end of each year. 3a. Prepare the journal entries for 2019. PAGE 2019 GENERAL JOURNAL DATE ACCOUNT TITLE DEBIT CREDIT 1 2 3 4 5 6 7 3b. Prepare the journal entries for 2020. PAGE 2020 GENERAL JOURNAL DATE ACCOUNT TITLE DEBIT…
Crane corporation owns equipment that cost $65, 600 and has a useful lofe of 8 years with no dalvage value. On July 1, 2025 Crane leases the equipment to Cullumber INC for one rental psyment of $12, 300 on January 1. Assuming Cullimber (lessee) elects to use the short term lease exception, prepare Cullumbers 2025 joirnal entry
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Shamrock Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $59,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $4,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $19,211 to the lessor, beginning on January 1, 2020. 5. The lessee’s incremental borrowing rate is 5%. The lessor’s implicit rate is 4% and is unknown to the lessee. 6. Shamrock uses the straight-line depreciation method for all equipment. Click here to view factor tables.(For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Correct…
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Skysong Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. 2. The cost of the asset to the lessor is $341,000. The fair value of the asset at January 1, 2020, is $341,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $20,010, none of which is guaranteed. 4. The agreement requires equal annual rental payments, beginning on January 1, 2020. 5. Collectibility of the lease payments by Skysong is probable. Click here to view factor tables. (a) Assuming the lessor desires a 8% rate of return on its investment, calculate the amount of the annual rental payment required.
Asian Transit Marine Corporation (Lessee) leases a forklift from NDP Leasing Corp. (Lessor). The lease, signed on January 1, 2019, specifies that NDP grants right-of-use of the lift to Asian Transit. The lease terms are as follows: 1. Lease is non-cancelable, term of four years, equal rental payments of P9,538.39 at the beginning of each year (annuity-due) 2. Forklift has a fair value of P40,000, economic life of six years, and residual value of P8,000 (unguaranteed). 3. Cost of forklift on NDP's books is P30,000. 4. No renewal options. Forklift reverts to NDP. Implicit rate of lessor is 8 percent and is known by Asian Transit. Required: Journal Entries for both the Lessor, and the Lessee from lease commencement until last lease payment. Show solutions of arrived amounts in good form.
Marin Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. 2. The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,225, none of which is guaranteed. 4. The agreement requires equal annual rental payments, beginning on January 1, 2020. 5. Collectibility of the lease payments by Marin is probable. Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to 0 decimal places e.g. 5,275.) MARIN LEASING COMPANY (Lessor)Lease Amortization Schedule Date Annual Lease Payment PlusURV Interest on…
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Nash Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $74,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $8,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $22,886.45 to the lessor, beginning on January 1, 2020. 5. The lessee’s incremental borrowing rate is 4%. The lessor’s implicit rate is 3% and is unknown to the lessee. 6. Nash uses the straight-line depreciation method for all equipment. Click here to view factor tables. https://education.wiley.com/wpng/api/v1/content/resource/8e661f8d-53ec-410b-b565-ac7e29fc0290Prepare all of the journal…

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