On December 31, 2020, Brick Co. leases Equipment to House, Inc.Annual Lease Payments made at beginning of Lease year $159,000Implicit rateGuaranteed Residual ValueExpected Residual ValuePresent value of an annuity due (7%,5)Present value of an ordinary annuity (7%,5)Present value of a single sum (7%,5)7%$155,500$56,5004.387214.100200.71299What journal entry would House, Inc. make at December 31, 2020 to record the leaseassuming this is a finance lease?O DR Right of Use Asset $768,152; CR Lease Liability $768,152O DR Right of Use Asset $808,426; CR Lease Liability $808,436O DR Right of Use Asset $737,850; CR Lease Liability $737,850O DR Right of Use Asset $626,980; CR Lease Liability $626,980

To record the lease assuming it is a finance lease, House, Inc. would make the following journal…

Answered: On December 31, 2020, Brick Co. leases…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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13. Euro Co. leased vehicles from Winters Co. on January 1, 2021, which is classified as an operating lease. The present value of the lease payments discounted at 11% was $91,500. Ten annual lease payments of $14,000 are due at each January 1 beginning January 1, 2021. The amortization of the right-of-use asset for the reporting year ending December 31, 2021, would be:
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Answer is $1,818 Please explain the reasoning and calculations
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3. At the beginning of 2020, VIXEN Company leased an equipment with the following information: Annual rental payable at the end of each year P450,000; residual value guarantee P50,000; Lease incentive received P20,000; Lease term 4 years; Useful life of the equipment 8 years; implicit interest rate 10%; present value of an ordinary annuity of 1 at 10% for 4 periods 3.17; present value of 1 at 10% for 4 periods 0.68. What is the cost of right of use asset? *
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Problem 1: Harry Potter Castle (HPC) leased equipment from Helen's Leasing Co. on July 1, 2024, in a sales-type lease. The present value of the lease payments discounted at 10% was $80,000. Ten annual lease payments of $12,000 are due each July 1, beginning July 1, 2024. The total decrease in earnings (pretax) in HPC's Dec. 31, 2024, income statement would be: Your answer:
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O On January 1, 2024, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic. Portions of the Equipment Leasing’s lease amortization schedule appear below: January 1 Payments Effective Interest Decrease in Balance Outstanding Balance $ 314,048 2024 $ 24,000 $ 24,000 $ 290,048 2025 $ 24,000 $ 14,502 $ 9,498 $ 280,550 2026 $ 24,000 $ 14,028 $ 9,972 $ 270,578 2027 $ 24,000 $ 13,529 $ 10,471 $ 260,107 2028 $ 24,000 $ 13,005 $ 10,995 $ 249,112 2029 $ 24,000 $ 12,456 $ 11,544 $ 237,568 2030 $ 24,000 $ 11,878 $ 12,122 $ 225,446 — — — — — — — — — — — — — — — 2041 $ 24,000 $ 11,272 $ 12,728 $ 44,627 2042 $ 24,000 $ 2,231 $ 21,769 $ 22,858 2043 $ 24,000 $ 1,143 $ 22,857 $ 0 Required: What is Majestic’s lease liability at the beginning of the lease (after the first payment)? What…
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, 2018
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