On December 31, Year One, the Dispersion Company decides to lease a piece of equipment rather than buy it. The lease is for 8 years. Payments are $49,000 every December 31 beginning on December 31, Year One. The implicit rate is 11 percent and is known by Dispersion.
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On December 31, Year One, the Dispersion Company decides to lease a piece of equipment rather than buy it. The lease is for 8 years. Payments are $49,000 every December 31 beginning on December 31, Year One. The implicit rate is 11 percent and is known by Dispersion.
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- On January 1, Lessee Company leases equipment with a useful life of 5 years for a 3-year lease term. Payments of $52,000 are due at the beginning of each year. The incremental borrowing rate is 3%. The present value of the payments is $151,320. Which of the following is true? Lease expense at the end of the first year is $52,000. Amortization expense at the end of the first year is $151,320 divided by 3. The lease liability at the end of the first year is reduced by $52,000. The ROU asset at the end of the first year is $99,320.What's the answer?On 1/1/24, Half Inc entered into a lease agreement with Holes Co. Half leased a machine from Holes for 9 years. The estimated useful life of the machine is 9 years. At the end of the 9 year lease term, ownership of the machine will transfer back to Holes. The lease agreement calls for annual payments of $150,000, to begin on 1/1/24 and continue every January 1. The borrowing rate is 10%. The present value of the lease payments is $949,500. Half's year end is 12/31. Show all computations. a. Prepare a lease amortization table for 1/1/24, 1/1/25 & 1/1/26. (3 years only) b. Prepare journal entries for Half (lessee finance lease) for 1/1/24, 12/31/24 & 1/1/25.
- At the beginning of the year, Cazenovia, Inc. entered into a five-year lease for equipment that was valued at $95,000. The company will be required to make annual lease payments of $22,000 for 5 years at year-end.The implicit interest rate is 5% and the company classified the lease as a finance lease. 1. What is the reduction in the lease liability in the first year?An asset with a cost of $80,000 is leased on 1/1/x1. The lease is a sales-type lease for the lessor. Six annual lease payments are due on December 31 beginning on 12/31/x1. The asset will have no residual value. The lessor sets a rate of return of 8% and charges the lessee annual lease payments of $20,550. Present value factor of an ordinary annuity for six years at 8% 4.62288 Present value factor of an annuity due for six years at 8% 4.99271 Present value factor of a single sum for a six-year term at 8% .63017 In the journal entry at the inception of the lease under the gross method, what amount does the lessor credit to unearned interest? Group of answer choices A. $28,300 D. $43,300 B. $95,000 C. $123,300A construction company agreed to lease payments of $514.43 on construction equipment to be made at the end of every month for 8.75 years. Financing is at 11% compounded monthly. (a) What is the value of the original lease contract? (b) If, due to delays, the first 9 payments were deferred, how much money would be needed after 10 payments to bring the lease payments up to date? (c) How much money would be required to pay off the lease after 10 payments? (d) If the lease were paid off after 10 payments, what would the total interest be? (e) How much of the total interest would be due to deferring the first 9 payments?
- Sun company engaged in leasing a machine for quality control that requires payment of $2000 at the end of each month. The economic life of the machine is five years. sun company normally subject to 6% interest rate per year in business transactions assume lease period is 54 months provide the journal entry that must be made on the date. The lease contract is signed. The company signed a 3years lease on 1/8/2020, monthly payment is $5,000, the annual increase 2% on 1th of Aug every year. The discount rate is 4%. Please use excel to calculate the lease schedule of the right of use by month, and the dep of the lease. Accounting useful life for the leased premises if 3 years, the depreciation rate (straight-line) is 33.33%A 1,000-square-foot office space is leased at $15.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gross with an expense stop set at $6.65 per square foot, and yearly expenses per square foot are as follows: $6.00, $6.65, and $7.05. The lease provides for two months of free rent at the end of the lease term. If the lease term is three years and the discount rate is 10 percent, what is the effective rent per square foot?
- Pharoah Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $14,110 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 5% per year.Cullumber Company signed a lease for an office building for a period of 9 years. Under the lease agreement, a security deposit of $7,200 is made. The deposit will be returned at the expiration of the lease with interest compounded at 6% per year. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will Cullumber receive at the time the lease expires? (Round answer to 2 decimal places, e.g. 25.25.) Amount at the time the lease expiresWerner Chemical, Incorporated, leased a protein analyzer on September 30, 2024. The five-year lease agreement calls for Werner to make quarterly lease payments of $355,655, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. 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) Required: Determine the present value of the lease payments on September 30, 2024. What pretax amounts related to the lease would Werner report in its balance sheet on December 31, 2024? What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2024? What pretax amounts related to the lease would Werner report in its statement of cash flows for the year…