What is Daniel's right of use of asset at December 31, 2016?
Q: American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton…
A: A lease is an agreement between the lessor and lessee where the lessor allows the lessee to use…
Q: Crane Corporation manufactures drones. On December 31, 2024, it leased to Blossom Company a drone…
A: A lease seems to be a legal agreement wherein one party transmits land or personal belongings to the…
Q: Blossom Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning…
A: Blossom Steel Company records the leased equipment and related liabilities on December 31, 2025,…
Q: On January 1, 2023, Shrek Inc. enters into a seven-year non-cancellable lease with Fiona Ltd. for…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024.…
A: The objective of the question is to determine the pretax amounts related to the lease that Abbott…
Q: pany leased a new machine from Keriboomboom Company on January 1, 2016, under a lease with the…
A: Solution:- As per FASB and GAAP, a lease is classified as capital lease if any of the following four…
Q: RENTER entered into the contract on 1 January 2017 for 5 years, annual rental payments are P100,000…
A: SOLUTION- CALCULATION OF PRESENT VALUE OF LEASE PAYMENTS- LEASE PAYMENT = ANNUAL RENTAL + DIRECT…
Q: American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: On January 1, 2024, Sheridan Ltd. leased a machine from Carla Vista Equipment Ltd. The machine had…
A: Leasing typically refers to the contractual arrangement where one party, known as the lessor, grants…
Q: Gary Company leased a music studio from Prada company on a 6-year lease term at P250,000 annual…
A: Initial measurement: Lease liability = P1,252,520 Right-of-Use Asset = P1,252,520
Q: ABC Company is the lessee and will lease an asset owned by XYZ Company. The semi-annual cash…
A: In the given question, semi-annual payment of $ 500,000 will be made for next 5 years. Since the…
Q: ease term, on January 1, 2022, they were well paying $10,000 annually every January 1 for the next…
A: Interest expense in lease is the interest paid by the lessee for the right to use an asset. It is…
Q: On July 1, 2021, Ethan Corporation signed a 5-year non-cancelable lease for a machine with Best…
A: Future inflows include guranted residual cash flows
Q: Calculate the lease payment Wilson Ltd. will charge Sandhill Inc assuming that there is no mark up…
A: A lease is an agreement between two parties where the owner of the assets (Lessor) gives the right…
Q: Louis Company leased a machine from Millennium Corporation on January 1, 2010. The first annual…
A: "Additional executory costs" refer to ongoing expenses or financial obligations that a lessee (the…
Q: On January 1, 2021, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a…
A: A lease is a contract in which a owner of an asset (the lessor) offers the user of that asset(the…
Q: On January 1, 2021, Worcester Construction leased International Harvester equipment from Newton…
A: "Since you have asked a question with sub-parts more than three, as per guidelines, the first three…
Q: American Food Services, Inc., leased a packaging machine from Barton and Barton Corporation. Barton…
A: 1. Journal entry to record the beginning of the lease on January 1, 2018 for American Food Services…
Q: On January 1, 2020, EF Corp. leased an equipment for 5 years at semi-annual rental of ₱325,000…
A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…
Q: Boyce Company leased a music studio from Justine company on a 6-year lease term at P250,000 annual…
A: Annual lease payment=P250000Price at the end of 6 years=P200000Interest rate=12%Economic life=10…
Q: On July 1, 2021, Ethan Corporation signed a 5-year non-cancelable lease for a machine with Best…
A: Right to use asset consists of the following items - a) Present value of all the lease payments…
Q: Sandhill, Inc. manufactures machinery used in the mining industry. On January 2, 2025, it leased…
A:
Q: On August 1, 2012, Mimi Company leased a machine to DartCompany for a six-year period requiring…
A: SOLUTION- LEASE RECEIVABLE ACCOUNTS BALANCE AT THE INCEPTION OF THE LEASE = ANNUAL PAYMENT * PV OF…
Q: On January 1, 2020, EF Corp. leased an equipment for 5 years at semi-annual rental of ₱325,000…
A: The Right of Use (ROU) Asset is recognized on the lessee's balance sheet when they enter into a…
Q: Pharoah Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to…
A: Lease asset record by lessee: The lease debt is equal to the present value of future lease payments…
Q: ear capital lease on a warehouse on December 31, 2021. Lease payments of P520,000, which includes…
A: 1. The present value of an ordinary annuity of 1 for nine years at 9% is 5.6. Lease payments of…
Q: Abbott Equipment leased a protein analyzer to Werner Chemical, Incorporated, on September 30, 2024.…
A: The objective of the question is to calculate the pretax amounts related to the lease that Abbott…
Q: Alicia Inc. leased a machinery to Hannah & Co. on January 1, 2020. Lease term is 8 years. Annual…
A: Fair value of lease = present value of all lease rentals and guaranteed residual value. Since the…
Q: Integrity Company uses leases as a means of selling equipment. On July 1, 2021, the company leased a…
A: The cost of sale is equal to the carrying amount less the present value of unguaranteed residual…
Q: Charlotte Corp., a machinery dealer, leased a machine to Eleanor Corp. on January 1, 2022. The lease…
A: A lessor may classify a lease agreement as direct financing, sales-type, and operating lease. In an…
Q: n January 1, 2023, Ivanhoe Inc enters into a 5-year non-cancellable lease with Wilson ltd for…
A: Lease is kind of rental agreement where the equipment can be used as the owner of equipment with…
Q: ABC Company leased equipment to XYZ Company on July 1, 2020, for a ten-year period expiring June 30,…
A: Present Value of Lease receivables on July 1, 2020 = (Annual lease payment x Present value factor…
Q: On January 1, 2025, Haystack, Inc. leased equipment to Silver Point Company. The equipment had a…
A: Here,Fair Value of Equipment is $780,000Implict Rate of Leasing is 8%Lessee incremetal borrowing…
Q: Complete the journal entries in the following table. Do not enter $ sign 2018 DR ($)…
A: Given: On 1 January 2018, Venus Ltd leased a new machinery from Global Ltd for three years. Annual…
Q: American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton…
A: Solution 1: Journal Entries - American food service Date Particulars Debit Credit 01-Jan-21…
Q: Pepper, Inc. agrees to lease equipment from the Blue Corporation for 10 years at $25,000 at the end…
A: A lease is said to be a finance lease if it contains the following.If it cover the major portion of…
Q: American Food Services, Incorporated leased a packaging machine from Barton and Barton Corporation.…
A: Answer:- A lease is an integrated contract between two business entities whereby one firm lends…
Q: RENTER entered into the contract on 1 January 2017 for 5 years, annual rental payments are P100,000…
A: SOLUTION- WORKING- RIGHT TO USE ASSET- INITIAL LIABILITY (P100000 * ANNUITY FACTOR ,5 YEAR ,…
Q: ease payments of $35.000 with the first pay 0. Future lease payments are due on January the lease is…
A: When an equipment is leased , the leased equipment is debited and lease liability is credited
Q: Ball Company leased machinery to Denver Company on July 1, 2021, for a ten-year period expiring June…
A: A lease is a contract between two parties, the lessor and the lessee. The lessor is the owner of the…
Q: Myro Company leased a new machine from Myie Corp. on May 1, 2014 under a lease with the following…
A: Lease Accounting: Lease accounting is an accounting system used to record the financial impact due…
Q: Rayleigh Company had an asset costing P 5,239,000. The asset was leased on January 1, 2020 to…
A: A lease is a contract between the parties that provides the right to use the asset for an agreed…
Step by step
Solved in 2 steps
- Macinski Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $70,000 and fair value of $95,000. Under the 3-year, non-cancelable contract, Sharrer 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, 2017. Sharrer has an incremental borrowing rate of 9%. Macinski expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals of $34,133 are payable on each January 1st, beginning January 1, 2017. Present value of an ordinary annuity of 1 for 3 periods at 8% : 2.57710 Present value of an ordinary annuity of 1 for 3 periods at 9% : 2.53130 Present value of annuity due of 1 for 3 periods at 8% : 2.78324 Present value of an annuity due of 1 for 3 periods at 9% : 2.75911 Please indicate what the lessee would record for the following journal entries in 2017. Round to the nearest whole dollar. Dr. ROU Asset…Lessor CBA, Inc. leased a machine to lessee DF Co. The lease is noncancelable and requires DF to pay $6,000 per year, payable in advance, over a four-year period. CBA’s implicit interest rate (known to DF) is 6 percent. The lease term begins on January 1, 2020. The machine’s economic life is 7 years. The machine's book value is $26,000 and fair value $30,000, with a guaranteed residual value of $10,000. The collectability of the lease payments is probable for the lessor. (Note: Present value of an ordinary annuity of 1 for 4 periods at 6% is 3.46511, of an annuity due of 1 for 4 periods at 6% is 3.67301. Present value of 1 for 4 periods at 6% is 0.79209). Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one thousand is 1,000, not 1000. No $ sign. No positive or negative sign. 2. If no entry is required, write N/A. 3. Only use the following accounts: ROU asset, Lease liability, Depreciation expense, Interest expense, Cash, CGS,…American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $5.8 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Barton and Barton’s implicit interest rate was 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021.2. Prepare an amortization schedule for the four-year term of the lease. American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $5.8 million (fair value and…
- Pepper, Inc. agrees to lease equipment from the Blue Corporation for 10 years at $25,000 at the end of each year. The equipment has a fair value of $175,000 and an estimated useful life of 10 years. The lease includes a guaranteed residual value of $10,000. In addition to the lease payments, Pepper will pay $5,000 per year for a maintenance agreement. Pepper can finance this lease with its bank at a 12% rate. The lessor’s implicit lease rate, known to the lessee, is 10%. The lessor and the lessee use ASC 842 guidelines for lease accounting. Present value interest factors are: 10% 12% PV factor of $1 for 10 periods 0.38554 0.32197 PV factor for ordinary annuity for 10 periods 6.14457 5.65022 Upon acquisition, the leased equipment will be valued on Pepper’s balance sheet at: Multiple Choice A. $144,475. B. $157,469. C. $175,000. D. $250,000.American Food Services, Incorporated leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2024. The lease agreement for the $4.8 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Barton and Barton's implicit interest rate was 9%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2024 and 2026. Complete this question by entering your answers in the tabs below. Req 1 Year Prepare an amortization schedule for the four-year…Davidson, Incorporated leased a machine from Barwick Corporation. Barwick completed construction of the machine on January 1, 2024. The lease agreement for the $16,000,000 (fair value and present value of the lease payments) machine specified 4 equal payments at the end of each year. The useful life of the machine was expected to be 4 years with no residual value. Barwick's implicit interest rate was 9%. Lease date Fair value and present value of lease payments Lease term Useful life of machine Residual value Barwick's implicit interest rate 1. Determine the amount of each lease payment using Excel's PMT function 3. Prepare an amortization schedule for the 4-year term of the lease. Date 2. Prepare the journal entry for Davidson, Incorporated at the beginning of the lease on January 1, 2024. Date General Journal Debit January ,2024 January 1, 2024 December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 Totals 4. Record the first lease payment on December 31, 2024. Date…
- Ludwick Steel SA, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2019. Annual rental payments of €40,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Ludwick's incremental borrowing rate is 8%. Ludwick is unaware of the rate being used by the lessor. At the end of the lease, Ludwick has the option to buy the equipment for €5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no residual value. Ludwick uses the straight-line method of depreciation on similar owned equipment. Ludwick ends fiscal year at December 31. Present value of an annuity-due of 1 for 5 periods at 8% is 4.31213. Present value of an annuity-due of 1 for 5 periods at 6% is 4.46511. Present value of a single-sum of 1 for 5 periods at 8% is 0.68058. Instructions a. Prepare the journal entries that Ludwick should…American Food Services, Incorporated leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2024. The lease agreement for the $5.3 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Barton and Barton's implicit interest rate was 10%. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2024 and 2026. S Complete this question by entering your answers in the tabs below. Req 1 Year Prepare an amortization schedule for the…On January 1, 2022, Edward Corporation (lessor) enters into a ten-year lease of equipment to Kirk Corporation (lessee). The equipment has estimated useful life of 15 years. Lease payments are P380,000 per year all payable at the beginning of each year. The fair value of the leased asset on this date P3.132.161. The rate implicit in the lease is 6%. Kirk Guaranteed a residual value of P300,000. 8. How much interest income should Edward recognized in its December 31, 2022 statement of comprehensive income? 165,130 111,968 139,186 125,942 15. Assuming that the lease is a sales type lease and the cost of the asset is P2.500,000 and the residual value is unguaranteed, how much is the balance of lease receivable as of December 31, 2022 and the gross profit? P2,686,921 and P799,681 P2,917,291and P632,161 P2,739,722 and P799,681 P2,955,789 and P632,161
