On March 1, 2020, Tebow Company purchased a patent for $158,000 cash.Although the patent gives legal protection for 19 years, the patent will be used for only 2years.Assume straight-line amortization.Amortization per unit(Cost Res. Value)/Time = Amortization per yearAmortization per year X portion of year = AmortizationJournalize a) the purchase of the patent, and b) the amortization expense of the patent as ofDecember 31, 2020.DateabCheck All PartsDescriptionDebitCredit

The objective of the question is to journalize the purchase of the patent and the amortization…

Answered: On March 1, 2020, Tebow Company…

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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Present Value Calculation Amortization Schedule Journal entries Please include all steps of calcualtions for my reference. Thanks!
Sandiago Co leased the equipment to Dedi Inc, on April 1, 2016. The lease, properly accounted for as a sale by Sandiago, has a period of 8 years ending March 31, 2024. The first of 8 equal annual payments is Rp 17,500,000 per year (excluding implementation costs) was carried out on April 1, 2016. The cost of equipment for Sandiago was Rp. 94,000,000. The equipment has an estimated useful life of 8 years with no salvage value, Sandiago uses straight-line depreciation and depreciates a full year in the year of purchase. The cash selling price of this equipment is IDR 102,690,000. Required: (1) Prepare the journal entries needed to record the lease on Sandiago's books (2) How much interest income will Sandiago recognize in 20167
Amortization Expense. "A patent with a 15-year remaining legal life was purchased for $756,000. The patent will be commercially exploitable for another 6 years." I need to calculate the expense.
On October 1, 2022, Abbott Inc. purchased equipment costing $700,000 by paying $150,000 cash and signing a $550,000, 10%, 1-year note for the remainder. The face value of the note plus interest is due when the note matures in one year. The equipment will be used in a variety of R&D activities. It is expected to have a useful life of 5-years and a residual value of $20,000. Abbott uses the DDB method for the equipment. Required: In the journal below, record the equipment purchase on October 1, and record depreciation and accrued interest for 2022. Round all calculations to the nearest whole month and whole dollar.
Cullumber Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2023, that requires 6 annual payments of $38,000 each, beginning September 1, 2023. In addition, Cullumber guarantees the lessor a residual value of $27,000 at lease end. The equipment has a useful life of seven years. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE OF 1. (a) Using (1) tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the capital lease and prepare Cullumber's September 1, 2023 journal entry assuming an interest rate of 12%. (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. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.)…
Maris Co. purchased a machine on January 1, 2018, for P2,500,000 for the express purpose of leasing it. The machine is expected to have a five-year life, no salvage value, and be depreciated on a straight-line monthly basis. On April 1, 2018, under a cancellable lease, Maris leased the machine to Dunbar Company for P750,000 a year for a four-year period ending March 31, 2022. Maris incurred total maintenance and other related costs under the provisions of the lease of P25,000 relating to the year ended December 31, 2018. Harley paid P750,000 to Maris on April 1, 2018. Assuming an operating lease, what should be the income before income taxes derived by Maris Co. from this lease for the year ended December 31, 2018?
18) The Thomson Company (lessee) leased equipment from Columbus Industries on January 1, 2021. Columbus(lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term Annual payments Life of asset Lessor's implicit interest rate Lessee's incremental rate 3 years $120,000 beginning Jan. 1, 2021 3 years 8% 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Columbus would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for Columbus on January 1, 2021. Round to nearest dollar. 3. Prepare the adjusting journal entry for Columbus on December 31, 2021. Round to nearest dollar.
On January 1, 2017, Diamond Company agreed to lease some equipment from Norton Machinery. Relevant information is in the photo. Assume that anyone who depreciates the equipment will use the straight-line method, and that the equipment will havea salvage value of $ 0 on December 31, 2023. A. Assuming that lease payments are made at the start of the year, what is the amount of the annual lease payment that will enable Norton to earn their implicit rate of return?
On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $430,152 and has an expected economic life of five years. Aqua and Maywood expect the residual value at December 31, 2024, to be $66,000. Negotiations led to Maywood guaranteeing a $94,000 residual value. Equal payments under the lease are $132,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Maywood is aware that Aqua used a 7% interest rate when calculating lease payments. (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.) Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2021 and December 31, 2021, related to the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the…
Christina Co. has a factory equipment with a carrying amount of P700,000 and has a remaining useful life of 7 years. On January 1, 2020, Christina agreed to an exchange transaction with Kat & Inc. to transfer the equipment to the latter. The transfer satisfied the requirements of PFRS 15 to be a sale and Christina immediately leased it back for a lease term equal to the remaining life of the equipment. The sales price amounted to P500,000 while annual rental payable at the end of each year is P100,000 for an implicit rate of 10%. Selling price is equal to fair value. How much loss shall Christina recognize in relation to the sale and leaseback transaction? a. 681,578.63 b. 200,000 c. 194,736.75 d. 5,263.25
To raise working capital, ABC Company sold its storage building to Best Bank on January 1, 2021, for $950,000 and immediately leased the building back. The operating lease is for the next 10 years of the building’s estimated 20-year remaining useful life. The building has a fair value of $950,000 and a book value of $660,000 (its original cost was $1,000,000). The annual lease payments of $120,000 are payable to Best Bank each December 31, beginning from December 31, 2021. The lease has an implicit rate of 8%. Let's assume that both ABC Company and Best Bank use the straight-line depreciation method for fixed assets with zero residual value. Information of Time Value (i) present value of an ordinary annuity of $1 (n=10, i=8%) = 6.71008 (ii) present value of an annuity due of $1 (n=10, i=8%) = 7.24689 (iii) present value of $1 (n=10, i=8%) = 0.46319 Required: Prepare the appropriate entries for ABC Company on January 1, 2021 and December 31, 2021, to record the transaction and…
At January 1, 2024, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. • The lease agreement specifies annual payments of $25,000 beginning January 1, 2024, the beginning of the lease, and on each December 31 thereafter through 2031. The equipment was acquired recently by Crescent at a cost of $180,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. • Because the lease term is only nine years, the asset does have an expected residual value at the end of the lease term of $50,995. • Crescent seeks a 10% return on its lease investments. ● By this arrangement, the lease is deemed to be a finance lease. 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: 1. What will be the effect of the lease on Café Med's earnings for the first year (ignore taxes)? Note: Enter decreases with negative sign. 2. What…

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