Exercise 15-3 (Algo) Finance lease; lessee; balance sheet and income statement effects [LO15-2]On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreementcalls for Georgia-Atlantic to make semiannual lease payments of $604,355 over a five-year lease term, payable each June 30 andDecember 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses tocalculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of theequipment is $4.90 million.Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)Required:1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use assetand lease liability.2. What amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)?3. What amount related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2024(ignore taxes)?Note: For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest wholedollar.1. Present value2. Pretax amount for liability2. Pretax amount for right-of-use asset3. Pretax amount for interest expense3. Pretax amount for amortization expense

A lease is defined as a contractual agreement between two organizations where one of them provides…

Required: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? 3. What amount related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2024 (ignore taxes)?

Required: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? 3. What amount related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2024 (ignore taxes)?

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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Under ASC 842 when are lease classification and initial measurement determined? within one year of commencement can not be determined at the lease inception at the lease commencement
See attached picture C) What expenses related to this lease will Evans incur during the first year of the lease, and how will they be determined?
How will a 20-year lease obligation appear on the lessee's statement of financial position? a.as a long-term liability, only if an operating lease b.as a long-term liability, only if a finance lease c.as a long-term liability for any lease, operating or finance d.as a long-term asset for an operating lease
E1.
What is the proper accounting treatment to record a variable lease payment indexed off the CPI? Group of answer choices Record the lease liability based on highest annual increase in the CPI for the past 10 years. Calculate the lease liability based on the base payment and debit an additional expense in subsequent years based on the change in the CPI. Calculate the lease liability based on expected payments over the life of the lease after considering increases in the CPI. Capitalize and depreciate the increased payments based on CPI indexing.
c) The information below relates to a leasing arrangement between Frankfield Leasing Company and Boswell Manufacturing Company, a lessee. Inception date Lease term (non cancellable) January 1, 2020 5 years Annual lease payment due at the beginning of each $28,500 year beginning January 1, 2020 Fair value of asset at January 1, 2020 Economic life of leased equipment $130,000 6 years Residual value of equipment at end of lease $25,270 term, unguaranteed by the lessee Lessor's implicit rate (not known by the lessee) 6% Lessee's incremental borrowing rate 8% The asset will revert to the lessor at the end of the lease term. There is an expected residual value of $25,270 which is unguaranteed by the lessee. The lessee uses the straight-line depreciation method for all equipment. (Round all figures to the nearest $1.)
1. 2. The lessee makes a lease payment of $75,200 to the lessor for equipment in an operating lease transaction. Wildhorse Company leases equipment from Noble Construction Inc. The present value of the lease payments is $658,000. The lease qualifies as a capital lease.. Prepare the journal entries that the lessee should make to record the above transactions assuming the entities report under ASPE. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles 1. Debit Credit
Do not give answer in image and hand writing
Use the same information in above, How much is the rental income to be recognized in the 2012 statement of comprehensive income of the buyer-lessor? a. P600,000 b. P329,272 c. P300,000 d. P270,728
See attached picture D) How should Evans report the lease transaction on its December 31, 2017 balance sheet?
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pharoah Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate January 1, $126,840 $55,000 $50,000 6 years 6 years $653,000 9 % 9 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.
am. 104.