Sage Hill Company leases an automobile with a fair value of $12,257 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $250 per month (at the beginning of each month). 3. Sage Hill guarantees a residual value of $1,190. Delaney expects the probable residual value to be $1,190 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Sage Hill’s incremental borrowing rate is 6% a year (0.5% a month). Simon’s implicit rate is unknown. Click here to view factor tables. (a) What is the nature of this lease to Sage Hill? The nature of this lease is a/an select a nature of the lease lease. eTextbook and Media List of Accounts Attempts: 2 of 3 used What is the present value of the lease payments to determine the lease liability?
Sage Hill Company leases an automobile with a fair value of $12,257 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months. 2. Rental of $250 per month (at the beginning of each month). 3. Sage Hill guarantees a residual value of $1,190. Delaney expects the probable residual value to be $1,190 at the end of the lease term. 4. Estimated economic life of the automobile is 60 months. 5. Sage Hill’s incremental borrowing rate is 6% a year (0.5% a month). Simon’s implicit rate is unknown. Click here to view factor tables. (a) What is the nature of this lease to Sage Hill? The nature of this lease is a/an select a nature of the lease lease. eTextbook and Media List of Accounts Attempts: 2 of 3 used What is the present value of the lease payments to determine the lease liability?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10GI: Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6...
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Sage Hill Company leases an automobile with a fair value of $12,257 from John Simon Motors, Inc., on the following terms:
Click here to view factor tables.
| 1. | Non-cancelable term of 50 months. | |
| 2. | Rental of $250 per month (at the beginning of each month). | |
| 3. | Sage Hill guarantees a residual value of $1,190. Delaney expects the probable residual value to be $1,190 at the end of the lease term. | |
| 4. | Estimated economic life of the automobile is 60 months. | |
| 5. | Sage Hill’s incremental borrowing rate is 6% a year (0.5% a month). Simon’s implicit rate is unknown. |
Click here to view factor tables.
(a)
What is the nature of this lease to Sage Hill?
| The nature of this lease is a/an select a nature of the lease |
| lease. |
eTextbook and Media
List of Accounts
Attempts: 2 of 3 used
What is the present value of the lease payments to determine the lease liability?
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