July 1, 2018, Gee Company leased a delivery truck from Marr Compar 3-year operating lease. Total rent for the term of the lease will be P360,000 payable as follows: 12 months at P5,000= P60,000 12 months at P7,500= 90,000 12 months at P17,500= 210,000
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- On August 1, 2019, PhaAviation leased two helicopters from WayoAircraft for an initial period of 12 months with a provision for a continuation of a month-to-month basis. The lease is property classified under a low value asset. Lease payments are to be made as follows: 1st two months-P15,000 per month Next three months-P12,000 per month Next three months-P10,000 per month Last four months-P 7,500 per month After the first year, the rent continues at P6,000 per month. How much is PhaAviation’s rent expense for the year ended December 31, 2019? A.P10,500 B.P52,500 C.P66,000 D.P126,000 How much is PhaAviation’s prepaid rent balance at December 31, 2019? A. P13,500 B.P23,500 C.P55,500 D.P66,000On 1 January 20X2 Grocers R Us entered into a lease to rent a mid-sized tractor trailer from TT Inc. with the following terms: • The company will rent a tractor-trailer beginning 1 April 20X2 for a 4-year period. The fair value of the trailer is $298,000 and has a useful life of 8 years. The expected residual value is $95,000. • Lease payments are due at the beginning of the year; • The asset reverts to the lessor at the end of the lease term. The lessee does not have any residual value guarantees. • TT's incremental borrowing rate is 7.4%, the rate implicit in the lease is 8.4% (which is known to the lessee). (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the lease payment. Lease payment 2. Prepare the journal entries for the 20X2, 20X3, and 20X4 fiscal years. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet…On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term (also the asset’s useful life), payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Inc. at a cost of $3 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. What pretax amount related to the lease would IC report in its balance sheet at December 31, 2021?2. What pretax amount related to the lease would IC report in its income statement for the year ended December 31, 2021?
- On June 1, 2018, ABC Company entered into a 5-year nonrenewable lease, commencing on that date, for office space and made the following payments to the lessor: Bonus to obtain a lease for P300,000; First months rent for P100,000 and Last month’s rent for P100,000. Compute the total rent income for 2018.s2. On August 31, 2018, Simmons Inc. leased warehouse equipment from Covington Corp. The lease agreement calls for Simmons to make semiannual lease payments of $50,000 over a 7-year lease term, payable at August 31 and February 28, with the first payment on August 31, 2018. Simmons' incremental borrowing rate is 11%, the same rate Covington used to calculate lease payment amounts. Covington purchased the warehouse equipment at a cost of $700,000 on August 31, 2018 with an expected useful life of 10 years and no salvage value. The fiscal year for both Simmons and Covington ends on December 31. Required: a. What are the present value of the lease payments on August 31, 2018? b. Starting on August 31, 2018 prepare all journal entries related to the lease that Simmons would have to make through December 31, 2020. c. Starting on August 31, 2018 prepare all journal entries related to the lease that Covington would have to make through December 31, 2020. d. What amounts related to the lease…
- On January 1, 2020, Naruto Company leased a new machine from Sasuke Company. The following data relate to the lease transaction at the inception of the lease: Lease term 5 years Annual rental payable at beginning of each lease year 500,000 Useful life of machine 10 years Implicit interest rate 10% Present value of an annuity of 1 in advance for 5 periods at 10% 4.17 Present value of annuity of 1 in arrears for 5 periods at 10% 3.79 Fair value of the machine 2,500,000 The lease has no renewal option and the possession of the machine reverts to Sasuke when the lease terminates. At the inception of the lease, Naruto should record a lease liability ofSagarOn January 1, 2024, Lesco Leasing leased equipment to Quality Services under a finance/sales-type lease designed to earn Lesco a 14% rate of return for providing long-term financing. The lease agreement specified: 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). a. Ten annual payments of $59,000 beginning January 1, 2024, the beginning of the lease and each December 31 thereafter through 2032. b. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to Lesco was $321,104. c. The lease qualifies as a finance lease/sales-type lease. d. A 10-year service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $5,000 per year are specified, beginning January 1, 2024. Lesco was to pay this cost as incurred, but lease payments reflect this expenditure. Also included in the $59,000 payments is an insurance premium…
- KAPIT LANG CEREBELLUM leased a new machine to MALAPIT NA ANG FINISH LINE on January 01, 2012. The lease expires on January 01, 2017. Annual rental is P900,000. Additionally, on January 01, 2012, MALAPIT NA ANG FINISH LINE paid P500,000 to KAPIT LANG CEREBELLUM as a lease bonus and P250,000 as a security deposit to be refunded upon expiration of the lease. In KAPIT LANG CEREBELLUM’s 2012 statement of comprehensive income, the amount of rental revenue should be a. P1,400,000 b. P1,250,000 c. P1,000,000 d. P900,000es On January 1, 2021, Robertson Construction leased several items of equipment under a two-year operating lease agreement from Jamison Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $46,000 each, payable semiannually on June 30 and December 31 each year. The equipment was acquired by Jamison Leasing at a cost of $366,000 and was expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semi-annually. Required: Prepare the appropriate journal entries for the lessor (Jamison Leasing) from the beginning of the lease through the end of 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheetOn September 30, 2018, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make10 annual lease payments of $55,000 with the first payment due immediately. Accounting standards requirethe company to record a lease liability when recording this type of lease. Assuming an 8% interest rate, at whatamount should Ferguson record the lease liability on September 30, 2018, before the first payment is made?