Kingbird Company leases equipment for 8 years with an annual rental of $2,100 per year or $16,800 in total. General Leasing (the lessor) agrees to provide Kingbird with $200 for the first 2 years of the lease to defray needed repairs to the equipment. Determine the lease payments that Kingbird will pay for the first 3 years of the lease agreement. Lease payments $ A

Kingbird Company leases equipment for 8 years with an annual rental of $2,100 per year or $16,800 in total. General Leasing (the lessor) agrees to provide Kingbird with $200 for the first 2 years of the lease to defray needed repairs to the equipment. Determine the lease payments that Kingbird will pay for the first 3 years of the lease agreement. Lease payments $ A

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 9RE: Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would...

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Similar questions

Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.
Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?
Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the first year of the lease assuming the lease is classified as a finance lease. However, assume that Garvey is now required to make the 65,949.37 payments on January 1 each year and that the fair value at the lease inception is now 275,000 (65,949:37 4:169865).
amarisk Company leases equipment for 8 years with an annual rental of $1,600 per year or $12,800 in total. General Leasing (the lessor) agrees to provide Tamarisk with $300 for the first 2 years of the lease to defray needed repairs to the equipment Determine the lease payments that Tamarisk will pay for the first 3 years of the lease agreement Lease payments
Splish Brothers Company leases equipment for 8 years with an annual rental of $2,900 per year or $23,200 in total. General Leasing (the lessor) agrees to provide Splish Brothers with $400 for the first 2 years of the lease to defray needed repairs to the equipment. Determine the total lease payments that Splish Brothers will pay for the first 3 years of the lease agreement. Lease payments
Fieger Company leases equipment for 8 years with an annual rental of $2,000 per year or $16,000 in total. General Leasing (the lessor) agrees to provide Fieger with $300 for the first 2 years of the lease to defray needed repairs to the equipment. Determine the lease payments that Fieger will pay for the first 3 years of the lease agreement
Company A leases equipment from Company B in a finance lease. Lease payments of $3,226 are due quarterly over a 10 year period, with the first payment due July 1, the beginning of the lease. The annual interest rate is 8%. What is the outstanding balance in the Lease Payable account after the second payment? What is the outstanding balance in the Right-of-Use asset account after the second payment?
Core Co. leased a piece of manufacturing equipment from E-So Co. with the following terms: Annual lease payment: $990,000 Term of lease: 5 years Interest rate: 4% Lease commences on January 1, 2023 Payments are made on December 31 of each year in the lease term For parts a and b: a. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as a finance lease. b. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as an operating lease. Operating Lease Finance Lease a. Finance lease: Date Jan. 1, 2023 Account To record the start of the finance lease. Dec. 31, 2023 To record the amortization of leased asset. Dec. 31, 2023 Dec. 31, 2024 Dec. 31, 2024 To record the lease payment. To record the amortization of leased asset. To record the lease payment. > > > > > > > > > > Debit Credit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
On January 1, 20x1, Entity Y leases out a piece of equipment to Entity X. Information on the lease is as follows: Lease term 3 years Annual rent payable at the end of each year 100,000 Interest rate implicit in the lease 10% The lease provides for the transfer of ownership of the equipment to the lessee at the end of the lease term. What total amount of finance income will Entity Y recognize over the lease term?
Recognize for year one ?
Urmilaben
Callaway Golf Co. leases telecommunications equipment from Sandhill Company. Assume the following data for equipment leased from Sandhill Company. The lease term is 5 years and requires equal rental payments of $30,380 at the beginning of each year. The equipment has a fair value at the commencement of the lease of $147,000, an estimated useful life of 8 years, and a guaranteed residual value at the end of the lease of $15,190. Sandhill set the annual rental to earn a rate of return of 6%, and this fact is known to Callaway. The lease does not transfer title or contain a bargain purchase option, and is not a specialized asset. How should Callaway classify this lease? ✓ Finance lease Operaing lease Sales-type lease