The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sage 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 Click here to view factor tables. (a) $ Annual Lease Payment Plus GRV January 1, $ $110,269 $46,000 $41,000 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. Interest on Liability 6 years 6 years $622,000 Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.) 5 % 5 % SAGE COMPANY (Lessee) Lease Amortization Schedule $ Reduction of Lease Liability $ Lease Liability
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sage 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 Click here to view factor tables. (a) $ Annual Lease Payment Plus GRV January 1, $ $110,269 $46,000 $41,000 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. Interest on Liability 6 years 6 years $622,000 Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.) 5 % 5 % SAGE COMPANY (Lessee) Lease Amortization Schedule $ Reduction of Lease Liability $ 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 9E: Lessor Accounting with Guaranteed Residual Value Use the information for Edom Company in E20-8,...
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