← Chapter 20 - Homework Question 4 of 7 View Policies Show Attempt History < > Current Attempt in Progress 1.47/14 E : Laura Leasing Company signs an agreement on January 1, 2025, to lease equipment to Plote 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, 2025, is $80,000. 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 $7,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $25,562.96 to the lessor, beginning on January 1, 2025. 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. 6. Plote 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) Your answer is partially correct. Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) Annual Lease Date Payment 1/1/25 1/1/25 1/1/26 1/1/27 eTextbook and Media Solution 0 +A +A $ PLOTE COMPANY (Lessee) Lease Amortization Schedule Interest on Liability List of Accounts Save for Later Last saved 14 hours ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. 0 +A Reduction of Lease Liability +A $ A SUPPORT Lease Lial Assistance Used Attempts: unlimited Submit Answer The parts of this question must be completed in order. This part will be available when you complete the part above. (b)
← Chapter 20 - Homework Question 4 of 7 View Policies Show Attempt History < > Current Attempt in Progress 1.47/14 E : Laura Leasing Company signs an agreement on January 1, 2025, to lease equipment to Plote 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, 2025, is $80,000. 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 $7,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $25,562.96 to the lessor, beginning on January 1, 2025. 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. 6. Plote 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) Your answer is partially correct. Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) Annual Lease Date Payment 1/1/25 1/1/25 1/1/26 1/1/27 eTextbook and Media Solution 0 +A +A $ PLOTE COMPANY (Lessee) Lease Amortization Schedule Interest on Liability List of Accounts Save for Later Last saved 14 hours ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. 0 +A Reduction of Lease Liability +A $ A SUPPORT Lease Lial Assistance Used Attempts: unlimited Submit Answer The parts of this question must be completed in order. This part will be available when you complete the part above. (b)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Laura leasing company on januar 1, 2025, to lease to Plote Company. the following information relates to this agreement.
Transcribed Image Text:← Chapter 20 - Homework
Question 4 of 7
View Policies
Show Attempt History
< >
Current Attempt in Progress
1.47/14
E :
Laura Leasing Company signs an agreement on January 1, 2025, to lease equipment to Plote 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, 2025, is $80,000.
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
$7,000, none of which is guaranteed.
4.
The agreement requires equal annual rental payments of $25,562.96 to the lessor, beginning on January 1, 2025.
5.
The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee.
6.
Plote 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)
Your answer is partially correct.
Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 2 decimal places, e.g.
5,275.15.)
Annual Lease
Date
Payment
1/1/25
1/1/25
1/1/26
1/1/27
eTextbook and Media
Solution
0
+A
+A
$
PLOTE COMPANY (Lessee)
Lease Amortization Schedule
Interest on
Liability
List of Accounts
Save for Later Last saved 14 hours ago.
Saved work will be auto-submitted on the due date. Auto-
submission can take up to 10 minutes.
0
+A
Reduction of Lease
Liability
+A
$
A
SUPPORT
Lease Lial
Assistance Used
Attempts: unlimited
Submit Answer
The parts of this question must be completed in order. This part will be available when you complete the part above.
(b)
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