LO 5 01:20:13 On January 1, 2024, Botosan Corporation leased equipment under a finance lease designed to earn the lessor a 11% rate of return for providing long- term financing. The lease agreement specified ten annual payments of $246,000 beginning January 1, and each December 31 thereafter through 2029. A 10-year service agreement was scheduled to provide maintenance of the equipment as required for a fee of $22,000 per year. Insurance premiums of $15,500 annually are related to the equipment. The lease agreement specified that both amounts were to be paid by the lessor and the lease payments reflect both expenditures. At what amount will Botosan record a right-of-use asset? Note: Round your answer to the nearest whole dollar amount. Multiple Choice O $1,176,669 $1,320,484 $1,464,299 $1,608,114

LO 5 01:20:13 On January 1, 2024, Botosan Corporation leased equipment under a finance lease designed to earn the lessor a 11% rate of return for providing long- term financing. The lease agreement specified ten annual payments of $246,000 beginning January 1, and each December 31 thereafter through 2029. A 10-year service agreement was scheduled to provide maintenance of the equipment as required for a fee of $22,000 per year. Insurance premiums of $15,500 annually are related to the equipment. The lease agreement specified that both amounts were to be paid by the lessor and the lease payments reflect both expenditures. At what amount will Botosan record a right-of-use asset? Note: Round your answer to the nearest whole dollar amount. Multiple Choice O $1,176,669 $1,320,484 $1,464,299 $1,608,114

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 15-33 (Algo) Nonlease payments; lessor and lessee [LO15-2, 15-7] On January 1, 2024, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 11% rate of return for providing long-term financing. The lease agreement specified the following: Ten annual payments of $61,000 beginning January 1, 2024, the beginning of the lease and each December 31 thereafter through 2032. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $346,464. The lease qualifies as a finance lease/sales-type lease. A 10-year service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $8,000 per year are specified, beginning January 1, 2024. NRC was to pay this cost as incurred, but lease payments reflect this expenditure. A partial amortization schedule, appropriate for both the lessee and lessor, follows: Note: Use…
Problem 3 On January 1, 2022, ABC Company signed into a leasing arrangement with XYZ Company for a machine that was valued at P3,500,000 in ABC's financial records. The lease runs through December 31, 2028 and every year on January 1st, payments of P855,300 are required. The seven percent interest rate set in the lease is deemed reasonable and appropriate compensation for ABC's use of its money. The machine will have a 7-year life, no residual value, and will be depreciated on a straight line basis, according to XYZ. The lease is designed to be a sales lease. For the fiscal year ending December 31, 2022, determine the following: a. ABC's gross income from sales b. ABC's interest income c. ABC's pretax total income from the lease
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Q46.
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23
Rey
23. Partially correct answer icon Your answer is partially correct. Tamarisk Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $38,200 each, beginning December 31, 2019. In addition, Tamarisk guarantees the lessor a residual value of $18,500 at the end of the lease. However, Tamarisk believes it is probable that the expected residual value at the end of the lease term will be $8,500. The equipment has a useful life of 7 years. Assume that for Lost Ark Company, the lessor, collectibility of lease payments is probable and the carrying amount of the equipment is $170,000.Prepare Lost Ark’s 2019 and 2020 journal entries, assuming the implicit rate of the lease is 11% and this is known to Tamarisk. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal…