Vishnu Wildhorse Corporation, which uses ASPE, leased equipment it had specifically purchased at a cost of $183,800 for Sheffield, thelessee. The term of the lease is 11 years, beginning January 1, 2023, with equal rental payments of $26,679 at the beginning of eachyear. Sheffield pays all executory costs directly to third parties. The equipment's fair value at the lease's inception is $183,800. Theequipment has a useful life of 12 years with no residual value. The lease has an implicit interest rate of 11%, no bargain purchaseoption, and no transfer of title. Collectibility is reasonably assured, with no additional costs to be incurred by Wildhorse.Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.Using (1) tables, (2) a financial calculator, or (3) Excel functions, calculate the PV of the lease payments and prepare Wildhorse'sJanuary 1, 2023 journal entries at the inception of the lease. (List all debit entries before credit entries. Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter o for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.)Date Account Titles and ExplanationJan. 1Jan. 1(To record inception of lease.).(To record first lease payment.)eTextbook and MediaDebitCredit

The present value of the lease is computed by adding the present value of all lease rentals…

Using (1) tables, (2) a financial calculator, or (3) Excel functions, calculate the PV of the lease payments and prepare Wildhorse's January 1, 2023 journal entries at the inception of the lease. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit

Using (1) tables, (2) a financial calculator, or (3) Excel functions, calculate the PV of the lease payments and prepare Wildhorse's January 1, 2023 journal entries at the inception of the lease. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit

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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Sheridan Corporation, which uses ASPE, leased equipment it had manufactured at a cost of $150,100 for Bonita, the lessee. The equipment's regular selling price is $191,000. The term of the lease is 11 years, beginning January 1, 2023, with equal rental payments of $27,724 at the beginning of each year. Bonita pays all executory costs directly to third parties. The equipment's fair value at the lease's inception is $191,000. The equipment has a useful life of seven years with no residual value. The lease has an implicit interest rate of 11%, no bargain purchase option, and no transfer of title. Collectibility is reasonably assured, with no additional costs to be incurred by Sheridan. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare Sheridan's January 1, 2023 journal entries at the inception of the lease and the entry at December 31, 2023, to record interest. (List all debit entries before credit…
Carla Vista Corporation, which uses ASPE, leased equipment it had manufactured at a cost of $143,000 for Sheridan, the lessee. The equipment's regular selling price is $182,000. The term of the lease is 15 years, beginning January 1, 2023, with equal rental payments of $27,065 at the beginning of each year. Sheridan pays all executory costs directly to third parties. The equipment's fair value at the lease's inception is $182,000. The equipment has a useful life of seven years with no residual value. The lease has an implicit interest rate of 15%, no bargain purchase option, and no transfer of title. Collectibility is reasonably assured, with no additional costs to be incurred by Carla Vista. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare Carla Vista's January 1, 2023 journal entries at the inception of the lease and the entry at December 31, 2023, to record interest. (List all debit entries before…
Oriole Ltd., a public company following IFRS, recently signed a lease for equipment from Costner Ltd. The lease term is 7 years and requires equal rental payments of $19,049 at the beginning of each year. The equipment has a fair value at the lease's inception of $104,500, an estimated useful life of 7 years, and no residual value. Oriole pays all executory costs directly to third parties. The appropriate interest rate is 9%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Using tables, a financial calculator, or Excel functions, calculate the amount of the right-of-use asset and lease liability. Prepare the initial entry to reflect the signing of the lease agreement and the first payment under the lease. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account…
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On January 1, 2023, Riverbed Ltd., a private company following ASPE, leased a building to Candle Corp. for a ten-year term at an annual rental of $86500. At the inception of the lease, Riverbed received $346000 covering the first two years rent of $173000 and a security deposit of $173000. This deposit will NOT be returned to Candle upon expiration of the lease but will be applied to payment of rent for the last two years of the lease. What portion of the $346000 should be shown as a current and long-term liability, respectively, in Riverbed's December 31, 2023 statement of financial position? Current Liability. Long-term Liability $0 $346000 $86500 $173000 $173000 $173000 $173000 $86500
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Amsterdam Leasing Company agrees to lease machinery to Harrisburg Corporation on January 1, 2019.The following information relates to the lease agreement. The term of the lease is 7 years with norenewal option, and the machinery has an estimated economic life of 9 years. The asset is not of aspecialized nature. The machinery cost is $525,000 and the fair value of the asset on January 1, 2019 is$700,000. At the end of the lease term, the asset reverts to lessor and has a guaranteed residual valueof $50,000 and Harrisburg estimates the expected residual value at the end of the lease term will be$50,000. Harrisburg amortizes all of its leased equipment on the straight-line basis. The leaseagreement requires equal of $109,365, beginning on January 1, 2019. The lessor believes thecollectability of the lease payments is probable. Amsterdam desires a rate of return of 5% on itsinvestments. Harrisburg’s incremental borrowing rate is 6%, and the lessor’s incremental implicit rate…
On January 1, 2023, Murray Manufacturing leased a building for use in its operations from Associated Realty. The 7-year, noncancellable lease requires annual lease payments of $17,000, beginning January 1, 2023, and at each December 31 thereafter through 2028.The lease payment includes costs related to property taxes of $2000. They also include payments for common area maintenance. The observable standalone price for the lease (including the property taxes) is $15,000 and the observable standalone price for the common area maintenance is $4000.In addition, Murray agrees to pay insurance on the building. Murray pays the insurance each year when it receives an invoice from Associated Realty for the insurance amount. On December 15, 2023, Murray was billed and paid $2500 for this insurance. Murray does not make the election to account for each separate lease component, along with its associated nonlease components, as a single lease component.The lease agreement does not transfer…
On January 1, 2023, Murray Manufacturing leased a building for use in its operations from Associated Realty. The 7-year, noncancellable lease requires annual lease payments of $22,000, beginning January 1, 2023, and at each December 31 thereafter through 2028.The lease payment includes costs related to property taxes of $2000. They also include payments for common area maintenance. The observable standalone price for the lease (including the property taxes) is $20,000 and the observable standalone price for the common area maintenance is $4000.In addition, Murray agrees to pay insurance on the building. Murray pays the insurance each year when it receives an invoice from Associated Realty for the insurance amount. On December 15, 2023, Murray was billed and paid $2500 for this insurance. Murray does not make the election to account for each separate lease component, along with its associated nonlease components, as a single lease component.The lease agreement does not transfer…
On January 1, 2023, Murray Manufacturing leased a building for use in its operations from Associated Realty. The 7-year, noncancellable lease requires annual lease payments of $22,000, beginning January 1, 2023, and at each December 31 thereafter through 2028.The lease payment includes costs related to property taxes of $2000. They also include payments for common area maintenance. The observable standalone price for the lease (including the property taxes) is $20,000 and the observable standalone price for the common area maintenance is $4000.In addition, Murray agrees to pay insurance on the building. Murray pays the insurance each year when it receives an invoice from Associated Realty for the insurance amount. On December 15, 2023, Murray was billed and paid $2500 for this insurance. Murray does not make the election to account for each separate lease component, along with its associated nonlease components, as a single lease component.The lease agreement does not transfer…