Homework 1 of Chapter 15. Q1. Python Company leased equipment from Hope Leasing on January 1, 2020. Hope recently purchased the equipment at a cost of $222,664. Other information: Lease term Annual payments Life of asset Fair value of asset Implicit interest rate Incremental rate 3 years $80,000 on January 1 each year 3 уears $222,664 8% 8% There is no expected residual value. Required: 1) Show how Hope determined the $80,000 annual lease payments. Fair Value: S aaa, lo loH - Present Valuee 2) Prepare appropriate journal entries for Hope for 2020 and 2021. Round your answers to the nearest whole dollar amounts. Prepare an amortization schedule for Hope. Outstanding Balance (lease receivable) 222. tolo4 Effective Interest Decrease in Balance Date Cash Payments Revenue 1/1/2020 1/1/2020 12/31/2020 12/31/2021 80.000 80.000 S0.000 gross lease investment
Homework 1 of Chapter 15. Q1. Python Company leased equipment from Hope Leasing on January 1, 2020. Hope recently purchased the equipment at a cost of $222,664. Other information: Lease term Annual payments Life of asset Fair value of asset Implicit interest rate Incremental rate 3 years $80,000 on January 1 each year 3 уears $222,664 8% 8% There is no expected residual value. Required: 1) Show how Hope determined the $80,000 annual lease payments. Fair Value: S aaa, lo loH - Present Valuee 2) Prepare appropriate journal entries for Hope for 2020 and 2021. Round your answers to the nearest whole dollar amounts. Prepare an amortization schedule for Hope. Outstanding Balance (lease receivable) 222. tolo4 Effective Interest Decrease in Balance Date Cash Payments Revenue 1/1/2020 1/1/2020 12/31/2020 12/31/2021 80.000 80.000 S0.000 gross lease investment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Homework 1 of Chapter 15.
Q1. Python Company leased equipment from Hope Leasing on January 1, 2020. Hope recently
purchased the equipment at a cost of $222,664.
Other information:
Lease term
Annual payments
Life of asset
Fair value of asset
3 years
$80,000 on January 1 each year
3 уears
$222,664
8%
8%
Implicit interest rate
Incremental rate
There is no expected residual value.
Required:
1) Show how Hope determined the $80,000 annual lease payments.
Fair Value: 3 aaa, o loH
- Present Valuee
2) Prepare appropriate journal entries for Hope for 2020 and 2021. Round your answers to
the nearest whole dollar amounts. Prepare an amortization schedule for Hope.
Outstanding
Balance (lease
receivable)
222. tolo4
Effective
Interest
Revenue
Decrease in
Balance
Date
Cash
Payments
1/1/2020
1/1/2020
12/31/2020
12/31/2021
80.000
80.000
$0.000
gross lease investment
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