On January 1, 2025, Carla Vista Animation sold a truck to Sandhill Finance for $41,000 and immediately leased it back. The truck w carried on Carla Vista's books at $34,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Carla Vista at lease-end. The lease requires five equal rental payments of $9,470 at the end of each year (first payment a January 1, 2026). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, with no expected residual value at the of the lease term. Prepare Carla Vista's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented whe the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Click here to view factor tables..

On January 1, 2025, Carla Vista Animation sold a truck to Sandhill Finance for $41,000 and immediately leased it back. The truck w carried on Carla Vista's books at $34,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Carla Vista at lease-end. The lease requires five equal rental payments of $9,470 at the end of each year (first payment a January 1, 2026). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, with no expected residual value at the of the lease term. Prepare Carla Vista's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented whe the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Click here to view factor tables..

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 12P: Comprehensive Landlord Company and Tenant Company enter into a noncancelable, direct financing lease...

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On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.
Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.
On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
On January 1, 2020, Indigo Animation sold a truck to Peete Finance for $48,000 and immediately leased it back. The truck was carried on Indigo's books at $43,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Indigo at lease-end. The lease requires 5 equal rental payments of $11,707 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 7%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Indigo's 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date Account Titles and Explanation Debit Credit /20 Cash Lease Receivable…
On January 1, 2025, Crane Animation sold a truck to Cullumber Finance for $40,000 and immediately leased it back. The truck was carried on Crane's books at $33,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Crane at lease-end. The lease requires five equal rental payments of $8,985 at the end of each year (first payment on January 1, 2026). The appropriate rate of interest is 4%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Crane's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275. Record journal entries in…
On January 1, 2025, Sunland Animation sold a truck to Carla Vista Finance for $48,000 and immediately leased it back. The truck was carried on Sunland's books at $44,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Sunland at lease-end. The lease requires five equal rental payments of $11,395 at the end of each year (first payment on January 1 , 2026). The appropriate rate of interest is 6%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Sunland's 2025 journal entries. (List all debit entries before credit entries.
On January 1, 2025, Oriole Animation sold a truck to Pharoah Finance for $43,000 and immediately leased it back. The truck was carried on Oriole's books at $35,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Oriole at lease-end. The lease requires five equal rental payments of $9,932 at the end of each year (first payment on January 1,2026). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Oriole's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275. Record journal entries in…
On January 1, 2020, Irwin Animation sold a truck to Peete Finance for $35,000 and immediately leased it back. The truck was carried on Irwin's books at $28,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Irwin at lease-end. The lease requires three equal rental payments of $8,696 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 6%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Irwin's 2020 journal entries.
On January 1, 2020, Martinez Animation sold a truck to Peete Finance for $44,000 and immediately leased it back. The truck was carried on Martinez’s books at $40,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Martinez at lease-end. The lease requires three equal rental payments of $12,500 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 4%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed.Prepare Martinez’s 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.)Click here to view factor tables. Date Account…
On January 1, 2020, Monty Animation sold a truck to Peete Finance for $38,000 and immediately leased it back. The truck was carried on Monty's books at $30,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Monty at lease-end. The lease requires three equal rental payments of $11,000 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 7%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Monty's 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date Account Titles and…
On January 1, 2018, Haley Corporation sold a Machine to Quick Finance for P140,000 and immediately leased it back. The machine was carried on Haley’s books at P112,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Haley at lease-end. The lease requires three equal rental payments of P34,784 at the end of each year (first payment on January 1, 2019). The appropriate rate of interest is 6%, the machine has a useful life of 5 years, and the residual value at the end of the lease term is expected to be P56,000, none of which is guaranteed. What is the balance of lease liability (net amount) as of December 31, 2018?
On January 1, 2017, Irwin Animation sold a truck to Peete Finance for $35,000 and immediately leased it back. The truck was carried on Irwin's books at $28,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Irwin at lease-end. The lease requires 5 equal rental payments of $8,309 at the end of each year (first payment on January 1, 2018). The appropriate rate of interest is 6%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Irwin's 2017 journal entries assuming these new facts. Must use factor table.