On October 1, 20X1, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual payments of $10,000 beginning September 30, 20X2. Vaughn's incremental borrowing rate is 11%, and it uses a calendar year for reporting purposes. The machine has a 12-year economic life with zero salvage value. Vaughn correctly classifies the lease as an operating lease. Using (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. At what amount should Vaughn record the leased equipment on October 1, 20X1? (Round your answer to the nearest whole dollar.) 2. What is the amount of lease expense that Vaughn should record for the year ended December 31, 20X1, and for the year ended December 31, 20X2? 3. How much of the lease liability should be classified as current on December 31, 20X1, and December 31, 20X2? (Round your intermediate calculations and final answers to 2 decimal places.) 1. Value of leased equipment 2. Lease expense 3. Total current liability EA $ 20X1 36,959 2,500 20X2

On October 1, 20X1, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual payments of $10,000 beginning September 30, 20X2. Vaughn's incremental borrowing rate is 11%, and it uses a calendar year for reporting purposes. The machine has a 12-year economic life with zero salvage value. Vaughn correctly classifies the lease as an operating lease. Using (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. At what amount should Vaughn record the leased equipment on October 1, 20X1? (Round your answer to the nearest whole dollar.) 2. What is the amount of lease expense that Vaughn should record for the year ended December 31, 20X1, and for the year ended December 31, 20X2? 3. How much of the lease liability should be classified as current on December 31, 20X1, and December 31, 20X2? (Round your intermediate calculations and final answers to 2 decimal places.) 1. Value of leased equipment 2. Lease expense 3. Total current liability EA $ 20X1 36,959 2,500 20X2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A person behaves in such a way that it benefits the maximum number of people and minimize pain. This type of behavior is consistent with which one of the following ethical principle? a. Ethical Relativism b. Fairness principle c. Utilitarianism principle d. Justice principle
Is "true and fair view" the same as truth? Give reason for your answer.
wrong give me the right answer please
Im having an issue with this problem. Thank you!
An expected social behavior from members of a society is called Oa. Norms O b. Information O C. Attitude O d. Behaviour
What is the meaning of Intestate?
Discuss how ross's condition be made better off without harming rosa
what exactly is a cookie jar reserve? Does using a cookie jar reserve follow GAAP? Does using a cookie jar reserve appear to be an ethical practice? Support your opinion. Your post should be more than a single sentence.
why did you not answer b?
What is difference between Musharakah and Ijarah explain with example ?