On December 31, 2018, LLM Company reported total costs of OR 650,000 incurred on Lease C that was acquired on October 1, 2018 for RO 50,000. The company issued a 10%, OR 600,000 note to operate the lease. Journalize the above transaction.
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On December 31, 2018, LLM Company reported total costs of OR 650,000 incurred on Lease C that was acquired on October 1, 2018 for RO 50,000. The company issued a 10%, OR 600,000 note to operate the lease. Journalize the above transaction.
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- Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $112,080. Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2016, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter Economic life of asset 2 years Interest rate charged by the lessor 8% Required: Prepare a lease amortization schedule for the two-year term of the lease and appropriate entries for Manufacturers Southern from the beginning of the lease through December 31, 2016. The company’s fiscal year-end is December 31. Appropriate adjusting entries are recorded at the end of each quarter.Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased the equipment at a cost of $1,400,000. Chance elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information: 1 year (4 quarterly periods) $56,000 at Jan. 1, 2018, and at Mar. 31, June 30, and Sept. 30. 5 years Lease term Quarterly lease paymenta Economic life of asset Interest rate charged by the lessor Required: Prepare appropriate entries for Chance from the beginning of the lease through December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)(Lessee Entries and Balance Sheet Presentation, Capital Lease) Ludwick Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2017. Annual rental payments of$40,000 are to be made at the beginning of each lease year (December 31). The taxes, insurance, and the maintenance costs are the obligation of the lessee. The interest rate used by the lessor in setting the payment schedule is 9%; Ludwick’s incremental borrowing rate is 10%. Ludwick is unaware of the rate being used by the lessor. At the end of the lease, Ludwick has the option to buy the equipment for $1, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Ludwick uses the straight-line method of depreciation on similar owned equipment.Instructions(a) Prepare the journal entry or entries, with explanations, that should be recorded on December 31, 2017, by Ludwick.(b) Prepare the journal entry or entries,…
- Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $126,890. (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.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $16,700 at the beginning of each period Economic life of asset 2 years Fair value of asset $126,890 Implicit interest rate 6% (Also lessee’s incremental borrowing rate) Required:Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization of the right-of-use asset is recorded at the end of each fiscal year (December 31) on a straight-line basis.On January 1, 2024, Blue Co. recorded a right-of-use asset of $869,628 in a 10-year operating lease. The lease calls for ten annual payments of $120,000 at the beginning of each year. The interest rate charged by the lessor was 8%. What amount will Blue Co. record for amortization expense on December 31, 2024? O $60,030 O $64,832 O $86,963 $59,970 ringA 3-year lease is initiated on January 1, 2017 for equipment with an expected useful life of 6 years. The Lessor is Supreme Asset Management Company (SAMC) and the lessee is Bogue Distributors Limited (BDL). The equipment reverts to SAMC upon expiration of the lease agreement. Three Payments are due to SAMC in the amount of $180,000 per year beginning December 31, 2017. An additional sum of $12,000 is to be paid annually by BDL for insurance. BDL guarantees a $20,000 residual value on December 31, 2019 to SAMC. The leased asset is expected to also have a $20,000 salvage value on December 31, 2019; therefore, the asset should be depreciated down to the $20,000 expected residual value. The lessee's incremental borrowing rate is 14% (and the lessor's implicit rate is 12%). PVIFA 14% PVIFA 12% 0.8772 0.8929 | 0.7972 0.7118 Year 1 Year 2 0.7695 Year 3 0.6750 Required: Record all the journal entries in the books of the BDL over the life of the lease (supported by the relevant calculations).…
- On January 1, 2018, This Co., a lessor, sold an equipment that it had been leasing under direct financing lease. On the same date data relating to sale and lease follow: Sale price - P400,000 Gross lease receivable - 180,000 Unearned interest income - 30,000 Implicit rate - 12% How much is the gain (or loss) on the sale of the leased asset on January 1, 2017?Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $139,107. 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) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $ 18,000 at the beginning of each period Economic life of asset 2 years Fair value of asset $ 139,107 Implicit interest rate (Also lessee’s incremental borrowing rate) 4% Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2025. Edison’s fiscal year ends December 31Core 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
- Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $94,500. Other information: 3 years $49,000 on January 1 each year 3 years $136, 382 Lease term Annual payments Life of asset Fair value of asset Implicit interest rate 8% Incremental rate 8% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet 2 3 > Record the lease. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018Determining Amounts in Operating Lease-Lessee Kulver's Inc. leases equipment from Equip Inc. on January 1 under a 3-year operating lease. Kulver's agrees to pay Equip Inc. $15,000 annually with the first payment due on January 1. As an incentive for Kulver's to sign the lease by January 1, Equip Inc. paid Kulver's Inc. $700. Kulver's also incurred legal fees for the review of the lease agreement ($200) and salaries for employees involved in negotiating the lease ($1,300). Assuming an incremental borrowing rate of 7% for Kulver's Inc., determine the value of the lease liability and the right-of- use asset on January 1 for Kulver's. Note: Round your answers to the nearest whole dollar. Lease liability $ 11,620 X Right-of-use asset $ 41,620✔ CheckFRM Ltd acquired an item of equipment and enters into a non -cancellable lease agreement with FEN Equipment LTd on 1January 2015. The lease consists of the following: Date of inception. 1/1/15 Duration of Lease 4 years Life of Leased asset. 5 years Lease payments (annual) $550000(annual) which includes $80000 for Maintenance and insurance costs per annum Guaranteed residual value (Added to final payment). $190000 Interest rate. 7% Formula for PV of $1/(1+k)n Formula for present value of annuity of $1 per period for n periods= 1-1/(1+k)n /k Where k is the discount rate expressed in decimal Required 1. Determine the PV of minimum lease rental payment. 2. Prepare the journal entries for FRM Ltd (The lessee) using the Net method for the following a) Transfer of control b) Payment of annual payments for 2015 and 2016.