Sage Hill Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,225, none of which is guaranteed. The agreement requires equal annual rental payments, beginning on January 1, 2020. Collectibility of the lease payments by Sage Hill is probable. Click here to view factor tables. Assuming the lessor desires a 10% rate of return on its investment, calculate the amount of the annual rental payment required. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to O decimal places eg. 5,275.) 2. 3. 4. 5. Amount of the annual rental payment $ Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to O decimal places e.g. 5,275.)
Sage Hill Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,225, none of which is guaranteed. The agreement requires equal annual rental payments, beginning on January 1, 2020. Collectibility of the lease payments by Sage Hill is probable. Click here to view factor tables. Assuming the lessor desires a 10% rate of return on its investment, calculate the amount of the annual rental payment required. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to O decimal places eg. 5,275.) 2. 3. 4. 5. Amount of the annual rental payment $ Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to O decimal places e.g. 5,275.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:CH 21 POST-CLASS - SU21
Question 5
Sage Hill Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement.
1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years.
The cost of the asset to the lessor is $451,000. The fair value of the asset at January 1, 2020, is $451,000.
The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $24,225, none of which is guaranteed.
The agreement requires equal annual rental payments, beginning on January 1, 2020.
Collectibility of the lease payments by Sage Hill is probable.
Click here to view factor tables.
2.
3.
4.
5.
Assuming the lessor desires a 10% rate of return on its investment, calculate the amount of the annual rental payment required. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and the final answer to O decimal places e.g.
5,275.)
Amount of the annual rental payment $
Prepare an amortization schedule that is suitable for the lessor for the lease term. (Round answers to O decimal places e.g. 5,275.)
Date
1/1/20
1/1/20
1/1/21
1/1/22
1/1/23
1/1/24
1/1/25
12/31/25
Annual Lease Payment Plus
URV
$
$
$
$
SAGE HILL LEASING COMPANY (Lessor)
Lease Amortization Schedule
Interest on Lease
Receivable
$
$
Recovery of Lease
Receivable
$
Lease Receivable
Transcribed Image Text:WP Ch 21 Post-Class - SU21
с
hp HP Connected
HH
NWP Assessment Player Ul Applic X
Home Page - Retail... WP WileyPLUS Achieve Greatness:...
education.wiley.com/was/ui/v2/question-player/index.html?renderMode=readOnly&questionId=5304c771-d2c2-4ce7-a680-82d57b542e11&questionIndex=4&launchId=9d3d5de9-d5f1-4b11-b334-4583aabbbfa1#/read
Date
Account Titles and Explanation
Question 5 (Read Only)
Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use
reversing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
(To record the lease)
(To record the receipt of lease payment)
X +
ACCT211 # 14652 O...
Debit
Credit
-----| || |--•
^ 4) e
■
4:56 PM
11/22/2022
X
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
Expert Answers to Latest Homework Questions
Q: Please provide the solution to this general accounting question using proper accounting principles.
Q: Please provide the correct answer to this general accounting problem using accurate calculations.
Q: Please explain the correct approach for solving this financial accounting question.
Q: Accounting solution
Q: I am searching for a clear explanation of this financial accounting problem with valid methods.
Q: Can you solve this general accounting problem with appropriate steps and explanations?
Q: Accounting answer
Q: Can you solve this general accounting question with accurate accounting calculations?
Q: Can you demonstrate the proper approach for solving this general accounting question with valid…
Q: Can you help me solve this financial accounting problem with the correct methodology?
Q: Please show me the correct way to solve this financial accounting problem with accurate methods.
Q: Please explain the correct approach for solving this general accounting question.
Q: Given the solution and financial accounting question
Q: I need assistance with this financial accounting question using appropriate principles.
Q: I need assistance with this general accounting question using appropriate principles.
Q: I need help finding the accurate solution to this general accounting problem with valid methods.
Q: Can you help me solve this general accounting problem with the correct methodology?
Q: Reflection on how public budgets influence community outcomes (e.g., housing, education, public…
Q: (a) For the circuit shown in Figure Q3(a) (RFC and Cc are forbias)
(i)
(ii)
Draw the AC small signal…
Q: Please solve this question step by step handwritten solution and do not use chat gpt or any ai…
Q: