Inception date Annual lease payment due at the beginning of May 1, 2017 year, beginning with May 1, 2017 $21,227.65 $ 4,000.00 5 years 10 years $65,000.00 $91,000.00 each 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, 2017 Lessor's implicit rate Lessee's incremental borrowing rate 10% 10%
(Lessee Entries with Bargain-Purchase Option) The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee.
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The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs.
Instructions
(Round all numbers to the nearest cent.)
(a) Discuss the nature of this lease to Rode Company.
(b) Discuss the nature of this lease to Mooney Leasing Company.
(c) Prepare a lease amortization schedule for Rode Company for the 5-year lease term.
(d) Prepare the
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