Sandhill Leasing Company leases a new machine to Wildhorse Corporation. The machine has a cost of $65,000 and fair value of $95,000. Under the 3-year, non-cancelable contract, Wildhorse will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2025. Sandhill expects to earn an 8% return on its investment, and this implicit rate is known by Wildhorse. The annual rentals are payable on each December 31, beginning December 31, 2025. Click here to view factor tables. (b) Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Date 1/1/25 12/31/25 12/31/26 12/31/27 Rent Receipt/ Payment $ Interest (8%) Revenue/ Expense Reduction of Principal $ Receivable
Sandhill Leasing Company leases a new machine to Wildhorse Corporation. The machine has a cost of $65,000 and fair value of $95,000. Under the 3-year, non-cancelable contract, Wildhorse will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2025. Sandhill expects to earn an 8% return on its investment, and this implicit rate is known by Wildhorse. The annual rentals are payable on each December 31, beginning December 31, 2025. Click here to view factor tables. (b) Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Date 1/1/25 12/31/25 12/31/26 12/31/27 Rent Receipt/ Payment $ Interest (8%) Revenue/ Expense Reduction of Principal $ Receivable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject:- accounting
Transcribed Image Text:Sandhill Leasing Company leases a new machine to Wildhorse Corporation. The machine has a cost of $65,000 and fair value of
$95,000. Under the 3-year, non-cancelable contract, Wildhorse will receive title to the machine at the end of the lease. The
machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2025. Sandhill expects to earn an 8%
return on its investment, and this implicit rate is known by Wildhorse. The annual rentals are payable on each December 31,
beginning December 31, 2025.
Click here to view factor tables.
(b)
Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years
involved. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final
answers to 0 decimal places e.g. 5,275.)
Date
1/1/25
12/31/25
12/31/26
12/31/27
S
Rent Receipt/ Payment
eTextbook and Media
List of Accounts
$
Interest (8%) Revenue/
Expense
Reduction of Principal
$
Receivable
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