nts) Vontsira recently entered into an unguaranteed, 6 year, finance lease. The asset was recorded at $2,502,000 and has an economic life of 9 years. At the end of the lease term the asset will have a market value of $375,000. The estimated market value at the end of the asset's economic life is $150,000. At the end of the lease Vontsira will return the asset. How much depreciation expense should Vontsira record for the first year of the lease? (IFO 13) $354,500 O $261,333 O $417,000 O $278,000

nts) Vontsira recently entered into an unguaranteed, 6 year, finance lease. The asset was recorded at $2,502,000 and has an economic life of 9 years. At the end of the lease term the asset will have a market value of $375,000. The estimated market value at the end of the asset's economic life is $150,000. At the end of the lease Vontsira will return the asset. How much depreciation expense should Vontsira record for the first year of the lease? (IFO 13) $354,500 O $261,333 O $417,000 O $278,000

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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The Arcade Company entered into a 10 year lease under which it made payments of R26 720 annually in advance. Arcade's borrowing rate was 10% per annum. The present value of the land was R125 000 and that of the buildings was R125 000. The value of the land at the end of 10 years was R167 500 and the value of the buildings was R32 500. The land would be classified as Select one: O a. a finance lease O b. an accounting lease O c. a financial lease O d. an operating lease
On January 1, 2020, A Company sold a building to B Company with a carrying amount of P4,200,000 for P5,500,000 and immediately leased it back. The building had a fair value of P4,700,000 at the date of sale, and had a remaining useful life of 10 years. Additional information on the lease is as follows: Lease term 5 years P500,000 Annuity made in advance 10% Implicit rate USE PV FACTORS ROUNDED TO 4 DECIMALS. ROUND FINAL ANSWERS TO NEAREST PESO. Determine total rent income recognized by B Company in 2020.
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Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $1,500 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Effective Decrease in Outstanding Payment Payment Interest Balance Balance 40,860 31,960 24,978 17,577 9,731 ?? 0 1 2 3 4 5 6 8,900 8,900 8,900 8,900 8,900 1,500 Multiple Choice $46,000 ?? 1,918 1,499 1,055 What is the total interest paid over the term of the lease? $2.760 ?? 85 ?? 6,982 7,401 7,845 ?? 1,415
A property is currently leased for $100,000 p.a. with fully recoverable outgoings. The lease has 3 years to run on the current (fixed) rent. The market rent for the property is $120,000. What is the current value of the property subject to the lease at a yield of 8% ? Assume rents are paid annually in arrears.
Recording Lease ObligationsE17B. Business Application ▶ Soong Corporation has leased a piece of equipmentthat has a useful life of 12 years. This capital lease requires payments of $43,000 per yearfor 12 years. Soong currently is able to borrow money at a long-term interest rate of8 percent. (Round to the nearest dollar.)1. Calculate the present value of the lease.2. Prepare the journal entry to record the lease agreement.3. Prepare the journal entry to record depreciation of the equipment for the first yearusing the straight-line method.4. Prepare the journal entries to record the lease payments for the first two years.
Hel me with question 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 (considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?
18) The Thomson Company (lessee) leased equipment from Columbus Industries on January 1, 2021. Columbus(lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term Annual payments Life of asset Lessor's implicit interest rate Lessee's incremental rate 3 years $120,000 beginning Jan. 1, 2021 3 years 8% 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Columbus would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for Columbus on January 1, 2021. Round to nearest dollar. 3. Prepare the adjusting journal entry for Columbus on December 31, 2021. Round to nearest dollar.
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