Problem 5 At the beginning of the current year, Wayv Company leased building to NCT U under an operating lease for 10 years at P500,00 per year, payable the first day of each lease year. Wayv Company paid P150,000 to a real estate broker as a finder fee. The building is depreciated P120,000 per year. Wayv Company incurred insurance arnd property tax expense totaling PS0,000 for the current year. What armount should be reported as net rent income for the current year?

Problem 5 At the beginning of the current year, Wayv Company leased building to NCT U under an operating lease for 10 years at P500,00 per year, payable the first day of each lease year. Wayv Company paid P150,000 to a real estate broker as a finder fee. The building is depreciated P120,000 per year. Wayv Company incurred insurance arnd property tax expense totaling PS0,000 for the current year. What armount should be reported as net rent income for the current year?

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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Question 19 At the beginning of current year, Don Rashed Company sold a building with remaining life. of 20 years and immediately leased it back for 5 years. Sales price is 20,000,000 for an 18,000,000 fair value. Upon reviewing the books of Don Rashed, the carrying amount of the building per FS is 10,800,000. The agreement consideration is 1500,000 with an implicit interest rate of 12%. What is the cost of right of use of asset?
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(AICPA) 6. On January 1, 20x8, Harrow Co. as lessee signed a five-year noncancellable equipment lease with annual payments of P100,000 beginning December 31, 20x8. The implicit interest rate is 10%. How much is the interest expense for the year ended December 31, 20x8? a. 37,900 (AICPA) b. 27,900 с. 24,200 d. 0
2 A company is leasing equipment for five years for an annual payment of $10,000. With an interest rate of 6%, this provides a present value of $42,124. The total cost of the equipment is $40,000, and there is no residual value. Should the company record this as a finance lease under the present value test? O Yes, because the present value plus cost of equipment exceeds total annual payments. O Yes, because the present value exceeds the total cost of equipment. O No, because the present value plus cost of equipment exceeds total annual payments. O No, because the present value exceeds the total cost of equipment.
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1- On January 1, year 8, Big Company leased equipment to Small Corporation under an operating lease. The present value of the end-of-year lease payments of $207,878 discounted at the implicit rate of 5% is $900,000. The expected economic life of the asset is seven years. The lease term is five years. What would Small Corporation record as amortization in year 8? Multiple Choice $135,000. $162,878. $180,000. $0. -------------------------------------------------------------------- 2- A Co. recorded a right-of-use asset of $400,000 in a 10-year operating lease. Payments of $65,100 are made annually at the end of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after the first year will be: Multiple Choice $360,000. $374,900. $376,900. $400,000.
8
Reardon Company leased an asset from Mackinac Company. Data: ● ● ● ● . Five-year, noncancellable lease begins 1/1/22. Asset life is five years Payments of $20,711 each January 1. Asset FMV $100,000; Lessor book value $85,000 Guaranteed salvage value $5,000; $1,500 salvage value expected by lessee Applicable rate is 4% Reardon's 12/31/22 Right of Use asset balance will be approximately Select one: O a. $79,259 O b. $78,923 O c. $76,712 O d. $79,013 Oe. $76,137
Help with questions 14,15,16,17
Problem 4 LLL company has an equipment with carrying value of P350,000 and with remaining estimated life of 5 years. On January 1, 2022, the LLL Company entered into an exchange transaction with Orange Company to transfer the equipment satisfied the requirements of IFRS 15 "Revenue from Contracts with Customers". The transfer proceeds amounted to P450,000 while the annual rental payable at the end of each year amounts to P100,000 with an incremental borrowing rate of 8%. LLL immediately leased back the said property for the remaining life of the property on the same date. The transfer proceeds is at fair value. 28. What is the cost of the right-of-use asset on the inception of the lease contract?
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $94,500. Other information: 3 years $49,000 on January 1 each year 3 years $136, 382 Lease term Annual payments Life of asset Fair value of asset Implicit interest rate 8% Incremental rate 8% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet 2 3 > Record the lease. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018
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