On January 1, 2024, Stone leased an office building. Terms of the lease require Stone to make 20 annual lease payments of $S124, 000 beginning on January 1, 2024. An 11% interest rate is implicit in the lease agreement. At what amount should Stone record the lease liability on January 1, 2024, before any lease payments are made? Note: Round your final answers to nearest whole dollar amount. Show less Table, Excel, or calculator function Table, Excel, or calculator function: Payment: n = i = Liability:

On January 1, 2024, Stone leased an office building. Terms of the lease require Stone to make 20 annual lease payments of $S124, 000 beginning on January 1, 2024. An 11% interest rate is implicit in the lease agreement. At what amount should Stone record the lease liability on January 1, 2024, before any lease payments are made? Note: Round your final answers to nearest whole dollar amount. Show less Table, Excel, or calculator function Table, Excel, or calculator function: Payment: n = i = Liability:

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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On January 1, 2022, ABC Company signed a 5-year non-cancelable lease for a building. This is also the period when the contract is enforceable.The terms of the lease called the ABC to make annual payments of P500,000 at the beginning of each year starting January 1, 2022. The contract provides that ABC will obtain the ownership at the end of the lease term. The building has an estimated useful life of 6 years and a P120,000 guaranteed residual value at the end of the five-year lease term. ABC has a constructive obligation to restore the machine to a condition still suitable for use at the end of the lease term. Estimated cost of restoration is P200,000. ABC incurred directly attributable cost of P90,000 to install the machine. The rate implicit in this contract is not readily determinable at the time of inception of the contract and incremental borrowing rate is at 9%. At what amount should ABC record the leased asset at January 1, 2022?
i know it’s a long one but i appreciate the help
On June 30, 2021, Fly-By-Night Airlines leased a jumbo jet from Boeing Corporation. The terms of the lease require Fly-By-Night to make 20 annual payments of $400,000 on each June 30. Generally accepted accounting principles require this lease to be recorded as a liability for the present value of scheduled payments. Assume that a 7% interest rate properly reflects the time value of money in this situation.Required:1. At what amount should Fly-By-Night record the lease liability on June 30, 2021, assuming that the first payment will be made on June 30, 2022?2. At what amount should Fly-By-Night record the lease liability on June 30, 2021, before any payments are made, assuming that the first payment will be made on June 30, 2021?
can u help me with the journal entries with working ?
Three different lease transactions are presented below for Pharoah Enterprises. Assume that all lease transactions start on January 1, 2024. Pharoah does not receive title to the properties, either during the lease term or at the end of it. The yearly rental for each of the leases is paid at the beginning of each year. Pharoah Enterprises prepares its financial statements using ASPE. Lease term Estimated economic life Yearly rental payment Fair market value of leased asset Present value of lease rental payments Interest rate Manufacturing Equipment 5 years 15 years $16,800 $117,600 $75,852 3.5% Office Equipment 6 years 3 years 7 years 6 years $18,000 $4,680 $102,000 $21,000 $94,356 $12,060 Vehicles 4% 8% Assume that Pharoah Enterprises has purchased the vehicle for $102,000 instead of leasing it and that the amount borrowed was $102,000 at 8% interest, with interest payable at the end of each year. Prepare the entries for 2024. (List all debit entries before credit entries. Credit…
On January 1,2024, Lowe's Inc. entered into a lease agreement with Traveler Inc. to lease a car for 3 years. The lease is accounted for as a finance lease and $5,000 in lease payments are due at at the beginning of the period starting January 1, 2024 and on December 31 of each year thereafter. There is no residual value. The rate implicit in the lease is 8%. On December 31, 2024, what entry (or entries) will Lowe's record regarding the lease? The present value of an annuity due at 8% for 3 years is 2.78326. (Round to whole dollars) OA. OB. OIC. O D. Lease expense Lease liability Right of use asset Interest expense Lease liability Cash Amortization expense Right-of-use asset Interest expense Lease liability Amortization expense Right-of-use asset Interest expense Lease liability Cash Debit 5,000 Debit 713 4,287 4,639 Debit 713 4,295 Debit 713 4,287 Credit 1031 3,969 Credit 5,000 4,639 Credit 713 4,295 Credit 5,000 A
Prepare the journal entries Leasing AG would make in 2020 related to the lease arrangement.
Help with parts 4 and 5. 4. Prepare journal entries for Sax for the years 2016 and 2017. 5. Next Level If the lease term is 3 years and the annual payment is $110,000, how would Sax classify the lease under (a) U.S. GAAP and (b) IFRS?
On January 1, 2021 a company enters a 12-month lease contract for a new laser copier machine. The lease contract legally binds the company to make twelve $2,500 monthly lease payments at the beginning of each month January 1 through December 1, 2021. a. On December 31, 2020 before the lease contract is signed, what is the avoidable cost of leasing the machine for the 2021 production period? What is the economic cost? b. After the lease contract is signed on January 1, what is the avoidable cost of using the machine for the rest of 2021? What is the economic cost? Now suppose the lease agreement is modified by adding a clause that gives the company the right to rent the laser copier to another company during 2021 lease period. The machine can be rented for $1,000 per month. c. What is the amount of the sunk cost on January 1 after the lease is signed? d. What is the amount of the sunk cost on August 1? e. What is the monthly avoidable (and economic) cost of using the laser copier…
On January 1, 2022, ABC Company signed a 5-year non-cancelable lease for a building. This is also the period when the contract is enforceable.The terms of the lease called the ABC to make annual payments of P500,000 at the beginning of each year starting January 1, 2022. The contract provides that ABC will obtain the ownership at the end of the lease term. The building has an estimated useful life of 6 years and a P120,000 guaranteed residual value at the end of the five-year lease term. ABC has a constructive obligation to restore the machine to a condition still suitable for use at the end of the lease term. Estimated cost of restoration is P200,000. ABC incurred directly attributable cost of P90,000 to install the machine. The rate implicit in this contract is not readily determinable at the time of inception of the contract and incremental borrowing rate is at 9%. How much depreciation expense will be taken up by ABC?
On June 1, 2021, Florida National leased a building. The lease agreement calls for Florida National to make lease payments of $3,618.18 each month for the next two years, with the first lease payment beginning June 30. The company’s normal borrowing rate is 8%.Required:1. Calculate the present value of the lease payments. Round to the nearest whole dollar. (Hint: Use a financial calculator or Excel)2. Record the lease on June 1, 2021.