(b)2 Your answer is partially correct.Use the information from part a. Assume that, on the same day the sale occurred, Bramble enters into an agreement to lease theequipment from Marin for 10 years with annual lcase payments of $66,306.38 at the end of cach ycar, beginning on December 31,2020. If Bramble has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record anyjournal entries necessary for Bramble from the sale and leaseback of computer equipment in 2020. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, eg. 5,275.25. Recordjournal entries in the order presented in the problem.)DateAccount Titles and ExplanationDebitCredit1/1/2012/31/20Interest ExpenseCash Respond to the requirements in each situation.Click here to view factor tables.(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)(a)V Your answer is correct.On January 1, 2020, Bramble Inc. sold computer equipment to Marin Co. The sales price of the equipment was $512,000 and itscarrying amount is $413,000. Record any journal entries necessary for Bramble from the sale of the computer equipment in 2020.(Credit account titles are automatically indented when the amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCredit1/1/20Cash512,000Gain on Disposal of Equipment99000Equipment413,000eTextbook and Media

In case of Sale and lease back, if the lease is financial lease then no sale is recognized in the…

Use the information from part a. Assume that, on the same day the sale occurred, Bramble enters into an agreement to lease the equipment from Marin for 10 ycars with annual lcase payments of $66,306.38 at the end of cach ycar, beginning on December 31, 2020. If Bramble has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Bramble from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, eg. 5,275.25. Record journal entries in the order presented in the problem.)

Use the information from part a. Assume that, on the same day the sale occurred, Bramble enters into an agreement to lease the equipment from Marin for 10 ycars with annual lcase payments of $66,306.38 at the end of cach ycar, beginning on December 31, 2020. If Bramble has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Bramble from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, eg. 5,275.25. Record journal entries in the order presented in the problem.)

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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Federated Fabrications leased a tooling machine on January 1, 2024, for a three-year period ending December 31, 2026 • The lease agreement specified annual payments of $47,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2025. The company had the option to purchase the machine on December 30, 2026, for $56,000 when its fair value was expected to be $71,000, a sufficient difference that exercise seems reasonably certain. • The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor's implicit rate of return was 12%. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease. 2. Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term. 3. Prepare the…
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Drew Company leased equipment from Biggs Leasing on January 1, 2021. The lease term is for ten (10) years with equal annual rental payments of $8,000 at the beginning of each year. In addition, Drew has the option to purchase the equipment at the end of the lease term for $5,000. It is reasonably certain that Drew will exercise this purchase option. At the outset of the lease term the equipment has a useful ife of twelve (12) years and a fair value of $56,000. The implicit rate of the lease is not known to Drew Drew's incremental borrowing rate is 12% A. Calculate the amount that Drew should record for the right-of-use asset and the lease liability. (Round to the nearest dollar. To get partial credit, show your calculations.) B. Prepare the journal entries that Drew should make on January 1, 2021 to 1) record the lease and to 2) record the first lease payment For the togibi
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