REQUIREMENTS: 1. What is the net lease receivable of the lessor at the commencement of the lease?
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Q: On December 31, 2016, Yard Art Landscaping leased a delivery truck from Branch Motors. Branch paid…
A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you…
Q: Pearl Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: Edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis…
A: Annual rental receipts = $100,000 Lease term = 5 years Interest rate implicit in the lease = 14%
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A: Leasee Windsor Corporation Lease Payment beginning of dec 31, 2019 $ 41,100 Period 7…
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A: The last entry made by Renee is an entry for the loss on residual value.
Q: On January 1, 2021, a lessee company signed a noncancelable finance lease for equipment. The lessee…
A: On 01.01.2021, A lessee company signed a noncancelable finance lease for equipment. Lessee make…
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A:
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Q: Berne Company (lessor) enters into a lease with Fox Company to lease equipment to Fox beginning…
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Q: On January 1, 2020, Crane Company leased equipment to Flynn Corporation. The following information…
A: Lease: A contractual agreement for an asset between two parties. The parties involved are the lessee…
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A: Operating leases give lessees the freedom to adjust to changing company demands without committing…
Q: On Jan 1, 2022, Baton Corporation signed a five-year non-cancelable lease for equipment from Bram.…
A: An agreement of contract that is prepared to transfer the right to use the resources for a…
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A: a. Operating lease: An operating lease is as often cancellable and incorporates maintenance.…
Q: edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis…
A: Journal entries are a part of the accounting system of the business entity where it identifies the…
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A: - Selling Price (Fair Value) for Sales-Type Lease: $291,165- Lease Receipts and Interest Income…
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Q: Braun Company acquired a piece of equipment from Tipper Company under a lease. The lease requires…
A: Lease Asset: The term "leased asset" refers to an asset that has been leased by its owner to another…
Q: Ayayai Incorporated leases a piece of equipment to Kingbird Corporation on January 1, 2020. The…
A: Rental payments refer to an amount that is paid to the tenant by the lessee for the use of an asset…
Q: Edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis…
A: All amounts are in dollar.
Q: On January 1, 2023, Precision Pumps leases nonspecialized pumping equipment to Mega Construction.…
A: The objective of this question is to calculate the balance in the net investment in the lease…
Q: On January 1, 2023, Murray Manufacturing leased a building for use in its operations from Associated…
A: Right-of-Use Asset and Lease Liability CalculationSince this is classified as a finance lease by…
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A: Lease liability: It is the obligation to make lease payments which is measured at the present value…
Q: On January 1, 2018, QuickStream Communications leased telephone equipment from Digium, Inc. Digium's…
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Mike Co. entered into a finance lease on January 1, 2016. A third party guaranteed the residual value of the asset under the lease estimated to be P 600,000 on January 1, 2021, the end of the lease term. Annual lease payments are P 500,000 due to each Dec. 31, beginning Dec. 31, 2016. The last payment is due Dec. 31, 2020. The remaining useful life of the asset was six years at the commencement of the lease. Both the lessor and lessee used 10% as the interest rate. The PV of 1 at 1 0% for 5 periods is .62, and the PV of an ordinary annuity of 1 at 10% for 5 periods is 3.79.
REQUIREMENTS:
1. What is the net lease receivable of the lessor at the commencement of the lease?
2.What is the net lease receivable of the lessor at the commencement of the lease?
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Solved in 2 steps
- On January 1, 2020, Sheridan Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. 2. 3. 4. 5. 6. The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $2,000, while the expected residual value at the end of the lease is $9,000. Equal rental payments are due on January 1 of each year, beginning in 2020. The fair value of the equipment on January 1, 2020, is $145,000, and its cost is $130,000. The equipment has an economic life of 8 years. Flynn depreciates all of its equipment on a straight-line basis. Sheridan set the annual rental to ensure a 6% rate of return. Flynn's incremental borrowing rate is 8%, and the implicit rate of the lessor is unknown. Collectibility of lease payments by the lessor is probable. Both the lessor and the lessee's accounting periods end on December 31. Date Account Titles and Explanation (To record the lease) (To record lease payment)…On December 31, 2019, Oriole Company leased machinery from Terminator Corporation for an agreed upon lease term of 3 years. Oriole agreed to make annual lease payments of $18,500, beginning on December 31, 2019. The expected residual value of the machinery at the end of the lease term is $9,250. Oriole guarantees a residual value of $9,250 at the end of the lease term, which equals the expected residual value of the machinery. What amount will Oriole record as its lease liability if the expected residual value at the end of the lease term is $6,250 and Oriole guarantees a residual of $9,250. Its incremental borrowing rate is 6% and the implicit rate of the lease is unknown? Lease liability = $________ please explain howedom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis beginning January 1, 2013. The lease terms, provisions, and related events are as follows: 11 1. The lease term is 5 years. The lease is noncancelable and requires annual rental receipts of $100,00 to be made in advance at the beginning of eacy year. 2. The equipment costs $313,000. the equipment has an estimatd life of 6 years and, at the end of the lease term, has an unguaranteed residual value of $20,000 accruing to the benefit of Edom. 3. Davis agrees to pay all executory costs. 4. The interest rate implicit in the leae is 14%. 5. The intial direct costs are insignificant and assumed to be zero. 6. The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor. Prepare journal entries for Edom for the years 2013 and 2014. Do not give answer in image formate
- On December 31, 2019, Shamrock Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $7,909 at the beginning of each year of the lease, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrock’s incremental borrowing rate is 8%, and the lessor’s implicit rate is unknown. (a.)What type of lease is this? This is a/an _________ lease. (operating / finance) (b.) Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places e.g. 5,275.) Present value of the lease payments $ (c.) Prepare all necessary journal entries for Shamrock for this lease through…Delray Leasing Company signs an agreement on January 1, 2025, to lease equipment to Sheridan Company. The following information relates to this agreement. Assume that the expected residual value at the end of the lease is $27,400, such that the payments are $22,227.36. 1. 2. 3. 4. 5. 6. The term of the non-cancelable lease is 4 years with no renewal option. The equipment has an estimated economic life of 6 years. The fair value of the asset at January 1, 2025, is $105,300. 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 $27,400, none of which is guaranteed. The agreement requires equal annual rental payments of $22,227.36 to the lessor, beginning on January 1, 2025. The lessee's incremental borrowing rate is 6%. The lessor's implicit rate is 5% and is unknown to the lessee. Sheridan uses the straight-line depreciation method for all equipment. Date Account Titles and Explanation (To record the lease) (To…Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2020, is $700,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Jensen estimates that the expected residual value at the end of the lease term will be $50,000. Jensen amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is probable. 6. Glaus desires a 5% rate of return on its investments. Jensen's incremental borrowing rate is 6%, and the lessor's implicit rate is unknown. Instructions (Assume the accounting period ends on…
- (Lessee Entries and Balance Sheet Presentation, Capital Lease) Ludwick Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2017. Annual rental payments of$40,000 are to be made at the beginning of each lease year (December 31). The taxes, insurance, and the maintenance costs are the obligation of the lessee. The interest rate used by the lessor in setting the payment schedule is 9%; Ludwick’s incremental borrowing rate is 10%. Ludwick is unaware of the rate being used by the lessor. At the end of the lease, Ludwick has the option to buy the equipment for $1, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Ludwick uses the straight-line method of depreciation on similar owned equipment.Instructions(a) Prepare the journal entry or entries, with explanations, that should be recorded on December 31, 2017, by Ludwick.(b) Prepare the journal entry or entries,…Norton company leased equipment from factiva leasing Co. On january 1, 2024, in an operating lease. The present value of the lease payments discounts at 5% was $102,000. Six annual lease payments of $20,000 are due beginning january 1, 2024, the beginning of the lease, and at each december 31 thereafter through 2028. The amount right - of - use asset reported on december 31, 2024 balance sheet would beOn January 1, 2020, Bensen Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $1,000, while the expected residual value at the end of the lease is $5,000. 2. Equal rental payments are due on January 1 of each year, beginning in 2020. 3. The fair value of the equipment on January 1, 2020, is $150,000, and its cost is $120,000. 4. The equipment has an economic life of 8 years. Flynn depreciates all of its equipment on a straight-line basis. 5. Bensen set the annual rental to ensure a 5% rate of return. Flynn's incremental borrowing rate is 6%, and the implicit rate of the lessor is unknown. 6. Collectibility of lease payments by the lessor is probable. Instructions (Both the lessor and the lessee's accounting periods end on December 31.) a. Discuss the nature of this lease to Bensen and Flynn. b.…
- Metlock Corporation recordeda right-of-use asset for $268,800 as a result of a finance lease on December 31, 2019. Metlock's incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Metlock made the first lease payment of $51,390 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no residual value. Prepare Metlock's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record interest expense) December 31, 2020 (To record amortization of the right-of-use asset)On December 31, 2019, Shamrock Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $7,909 at the beginning of each year of the lease, starting December 31, 2019. The machine has an estimated useful life of 6 years and a $4,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrock’s incremental borrowing rate is 8%, and the lessor’s implicit rate is unknown. Prepare all necessary journal entries for Shamrock for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit CreditOn January 1, 2018, QuickStream Communications leased telephone equipment from Digium, Inc. Digium’s cashselling price for the equipment is $1,306,578. The lease agreement specifies six annual payments of $300,000 beginning December 31, 2018, and at each December 31 thereafter through 2023. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higherof (a) the increase in the Consumer Price Index for the preceding year or (b) 3%. The CPI at the beginning of the leaseis 120. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 10%.Required:Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2018.
