Refer to the following lease amortization schedule. The 10 payments are madeannually starting with the beginning of the lease. Title does not transfer to thelessee and there is no purchase option or guaranteed residual value. The assethas an expected economic life of 12 years. The lease is noncancelable.Payment12345678910OCashPaymentMultiple ChoiceO$ 12,00012,00012,00012,00012,00012,00012,00012,00012,000$ 12,000O$8,111$12,000Effective Decrease in OutstandingInterestbalanceBalance$81, 10869,10864,01958,42152,26345,48938,03829,842$ 20,826$6,911$06,9116,4025,8425,2264,5493,804$ 2,984What amount would the lessee record as annual amortization on the right-of-use asset using the straight-line method?Note: Round your answer to the nearest whole dollar.•??$ 12,0005,0895,5986,1586,7747,4518,196$ 9,016????

A lease is a written agreement that indicates the conditions within which a lessor acknowledges to…

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 234 3 5 6 7 8 9 10 Cash Payment $ 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $ 12,000 Multiple Choice O $8,111 O $12,000 Effective Decrease in Outstanding Interest balance Balance $6,911 $0 6,911 6,402 5,842 5,226 4,549 3,804 $ 2,984 ? ? $ 12,000 5,089 5,598 6,158 6,774 7,451 8,196 $ 9,016 What amount would the lessee record as annual amortization on the right-of- use asset using the straight-line method? Note: Round your answer to the nearest whole dollar. ? ? $ 81,108 69,108 64,019 58,421 52,263 45,489 38,038 29,842 $ 20,826 ? ?

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 234 3 5 6 7 8 9 10 Cash Payment $ 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $ 12,000 Multiple Choice O $8,111 O $12,000 Effective Decrease in Outstanding Interest balance Balance $6,911 $0 6,911 6,402 5,842 5,226 4,549 3,804 $ 2,984 ? ? $ 12,000 5,089 5,598 6,158 6,774 7,451 8,196 $ 9,016 What amount would the lessee record as annual amortization on the right-of- use asset using the straight-line method? Note: Round your answer to the nearest whole dollar. ? ? $ 81,108 69,108 64,019 58,421 52,263 45,489 38,038 29,842 $ 20,826 ? ?

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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On 1 January 20X6 Fellini hired a machine under a finance lease. The cash price of the machine was $3.5 million and the present value of the minimum lease payments was $3.3 million. Instalments of $700,000 are payable annually in advance with the first payment made on 1 January 20X6. The interest rate implicit in the lease is 6%. What amount will appear under non-current liabilities in respect of this lease in the statement of financial position of Fellini at 31 December 20X7? A $1,479,000 B $2,179,000 C $1,702,000 D $2,266,000
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The lease agreement and related facts indicate the following: a. Leased equipment had a retail cash selling price of $300,000. Its useful life was five years with no residual value. b. Collectibility of the lease payments by the lessor was reasonably predictable and there were no costs to the lessor that were yet to be incurred. c. The lease term is five years and the lessor paid $265,000 to acquire the equipment (sales-type lease). d. Lessor’s implicit rate when calculating annual lease payments was 8%. e. Annual lease payments beginning January 1, 2016, the inception of the lease, were $69,571. f. Costs of negotiating and consummating the completed lease transaction incurred by the lessor were $7,500. Required: Prepare the appropriate entries for the lessor to record: 1. The lease and the initial payment at its inception. 2. Any entry(s) necessary at December 31, 2016, the fiscal year-end.
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Classifying Leases The following separate scenarios relate to a 5-year lease, pertaining to equipment with a fair value of $50,000. Assume in all scenarios that payments are made at the beginning of the period. 1. Lease payments include a fixed payment of $10,000 per year. 2. Lease payments include a fixed payment of $10,000 per year, plus $500 for insurance and $600 for a maintenance contract. 3. Lease payments will be $10,000 in the first year and will increase by 3% (calculated on the previous year's payment) for each of the following 4 years. 4. Lease payments will be $10,000 in the first year and will increase each of the following years by the increase in the CPI from the preceding year. The current CPI is 120 and is expected to increase to 122 at the end of the next year. 5. Lease payments will be $10,000 in the first year and will increase each of the following years by (a) the increase in the CPI from the preceding year, or (b) 3%, whichever is greater. The current CPI is 120…
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Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment CashPayment EffectiveInterest Decreasein balance Outstanding Balance 108,703 1 15,000 15,000 93,703 2 15,000 7,496 7,504 86,200 3 15,000 6,896 8,104 78,096 4 15,000 6,248 8,752 69,343 5 15,000 5,547 9,453 59,891 6 15,000 4,791 10,209 49,682 7 15,000 3,975 11,025 38,656 8 15,000 3,093 11,907 26,749 9 15,000 ? ? ? 10 15,000 ? ? ? What amount would the lessee record as annual amortization on the right-of-use asset using the straight-line method? (Round your answer to the nearest dollar.) Multiple Choice $9,370. $15,000.…
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Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $1,500 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Effective Decrease in Outstanding Payment Payment Interest Balance Balance 40,860 31,960 24,978 17,577 9,731 ?? 0 1 2 3 4 5 6 8,900 8,900 8,900 8,900 8,900 1,500 Multiple Choice $46,000 ?? 1,918 1,499 1,055 What is the total interest paid over the term of the lease? $2.760 ?? 85 ?? 6,982 7,401 7,845 ?? 1,415