Question: On January 1, 2016, Stephen Corp., a lessor, signed a direct financing lease. Stephen was to receive annual year-end payments of $10,000 for ten years, after which there was a guaranteed residual value of $8,000. The implicit interest rate was 8%. Actuarial information for 8%, ten periods follow: Present value of an ordinary annuity of $1 6.71008 Present value of the amount of $1 0.46319 On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

provide please answer

Question:
On January 1, 2016, Stephen Corp., a lessor, signed a direct financing lease. Stephen was to receive annual year-end payments of $10,000
for ten years, after which there was a guaranteed residual value of $8,000. The implicit interest rate was 8%. Actuarial information for 8%,
ten periods follow:
Present value of an ordinary annuity of $1 6.71008
Present value of the amount of $1
0.46319
On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?
Transcribed Image Text:Question: On January 1, 2016, Stephen Corp., a lessor, signed a direct financing lease. Stephen was to receive annual year-end payments of $10,000 for ten years, after which there was a guaranteed residual value of $8,000. The implicit interest rate was 8%. Actuarial information for 8%, ten periods follow: Present value of an ordinary annuity of $1 6.71008 Present value of the amount of $1 0.46319 On January 1, 2016, what amount should Stephen record as a debit to Lease Receivable?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education