Sarasota Equipment Leasing Company leased equipment to Sunland Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $580000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Sarasota Equipment Leasing and known to Sunland Healthcare is 8%. Sunland's incremental borrowing rate is 12%. The cost of the equipment on Sarasota Equipment Leasing accounting records was $780000. Assuming that the lease is appropriately recorded as an operating lease, on January 1 of each year when the payment is received and recorded by Sarasota Equipment Leasing Company as a debit to Cash, there would also be a: PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 12%, 4 periods 3.40183 3.03735 0.63552 credit to Lease Revenue of $580000. credit to Accumulated Depreciation of $580000. O credit to Unearned Lease Revenue of $580000. O credit to Gain on Sale of Asset of $132917.

Sarasota Equipment Leasing Company leased equipment to Sunland Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $580000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Sarasota Equipment Leasing and known to Sunland Healthcare is 8%. Sunland's incremental borrowing rate is 12%. The cost of the equipment on Sarasota Equipment Leasing accounting records was $780000. Assuming that the lease is appropriately recorded as an operating lease, on January 1 of each year when the payment is received and recorded by Sarasota Equipment Leasing Company as a debit to Cash, there would also be a: PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 12%, 4 periods 3.40183 3.03735 0.63552 credit to Lease Revenue of $580000. credit to Accumulated Depreciation of $580000. O credit to Unearned Lease Revenue of $580000. O credit to Gain on Sale of Asset of $132917.

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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