Yes No No Annual lease payments Beg. of yr. End of yr. Beg. of yr. End of yr. Lessor’s implicit rate (known by lessee) 5% 6
Q: Exercise 15-9 (Algo) Lessor calculation of annual lease payments; lessee calculation of asset and…
A: The objective of this question is to calculate the annual lease payments for each of the three…
Q: Please use Excel Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022.…
A: A lease is an arrangement by which one party gets the property for use for a fixed period, generally…
Q: Major Corp. leased a computer to Minor Corp. on January 1, 2020. The terms of the lease are as…
A: Lease is an agreement under which the one party (lessee) acquires the right to use the underlying…
Q: Gregg Corp. The following data relate to the lease transaction On December 30, 20x5, Entity A leased…
A: ANSWER 4 : The lease qualifies as the capital lease because lease term of 10 years exceeds the 75%…
Q: Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of…
A: A leased asset's "right to use" is the lessee's permission to use it as specified in the lease…
Q: (a) Quadri Ltd. enter into a lease agreement to purchase an asset on 1 January 2019 for a five year…
A: PERIOD OPENING BALANCE LIABILITY EXP (8%) LIABILITY REDUCTION (Installment) LIABILITY CLOSING…
Q: 35...continue The following facts pertain to a non-cancelable lease agreement between Faldo Leasing…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: 10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 6. 10,000 4,326 5,674…
A: answers Effective annual interest rate = 6394/53282= 12%
Q: The useful life of the leased property is 6 years. The asset will revert to the lessor at the end of…
A: There are two types of leases: 1. Finance Lease 2. Operating Lease A lease in which all risks and…
Q: Situation 3. 4 Lease term (years) Asset's useful life (years) Asset's fair value Purchase option…
A: Lease is an agreement whereby the lessor conveys to the lessee in return for payment the right to…
Q: How would Sunland (lessor) and Splish Brothers (lessee) classify this lease? Sunland would classify…
A: Lease is a transaction where lessor and lessee will enter into an agreement for the purpose of right…
Q: Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of…
A: A lease is defined as a contractual agreement between two organizations where one of them provides…
Q: Problem 1 At the beginning of the current year, an entity leased an equipment from a lessor with the…
A: Annual rental amount = $1,000,000 Present value annuity factor (10%, 5 period) = 1 - (1 + Interest…
Q: Exhibit Leased assets have an expected life of 5 years Depreciation is straight line Annual…
A: Computation of present value of a leased asset: year (a) Annual lease payment $ (b) Interest…
Q: Each of the three independent situations below describes a finance lease in which annual lease…
A:
Q: Direct Finance Lease - Lessor (PAS 17 and PFRS 16) Problem 18. On January 1,2011, SM leased an…
A: Annual Rental: The annual rental can be calculated as follows: Cost of Machinery / (1 + Implicit…
Q: On January 1, 2021, Harry Company leased ten trailers to Jennifer Company under a five- year…
A: Lease refers to the arrangement in which one party provides his/her asset for use to another for…
Q: E 15-9 Lessor calculation of annual lease payments; lessee calculation of asset and liability LO15-2…
A: A lease is a legal agreement between a lessor (the owner of an asset) and a lessee (the user of the…
Q: er to the following lease amortization schedule. The five payments are made annually starting with…
A: The lease payment are the periodic payments made to use the assets that belongs to another and no…
Q: wment Cash Payment Interest 1 2 3 4 5 6 7 8 9 10 $ 12,000 12,000 12,000 12,000 12,000 12,000 12,000…
A: An outstanding balance is an amount owed on any debt that carries interest, such as a credit card.…
Q: Refer to the following lease amortization schedule. The 10 payments are made annually starting with…
A: A lease is a financial arrangement in which one party grants the right to use the asset to other…
Q: Exercise 15-1 (Static) Lease classification [LO15-1] Lease term (years) Asset's useful life (years)…
A: Lease is an agreement whereby the lessor gives his identifiable asset to the lessee in return for…
Q: tion, determine the appropriate lease classification by the lessee and indicate why.…
A: Lessee is the owner of the equipment and he is interest in giving the right to use the equipment by…
Q: Each of the four independent situations below describes a finance lease in which annual lease…
A: Lease payments:Lease payments represent the periodic financial obligations that lessees undertake…
Q: On December 31, 20x0 an entity sells one of its assets to a leasing company and immediately leases…
A: Lease is an contract enforceable under the law, in which the owner of the asset rent the asset to…
Q: Lease facts: Date of lease – 6/1/19 Term – 3 years (expires 6/1/22) Semi-annual lease payments of…
A: When the implicit rate is given, we will take implicit rate than incremental borrowing rate…
Q: ease with the following provisions: 'IL
A: Here asked for Multi sub part question we will solve for first question for you. If you need…
Q: 51. On December 30, 2019, Haber Co. leased a new machine from Gregg Corp. The following data relate…
A:
Q: e of €
A: (a) As per IFRS 16 Finance lease is the lease where the lessor gives the asset to lessee for use in…
Q: Each of the four independent situations below describes a finance lease in which annual lease…
A: An agreement of contract that is prepared to transfer the right to use the resources for a…
Q: E 15-26 Lease concepts; finance/sales- type leases; guaranteed and unguaranteed residual value…
A: leases. - It is a contract between a lessor and a lessee wherein an asset is given to the lessee in…
Q: Each of the four independent situations below describes a finance lease in which annual lease…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: Question 09020 The following details relate to the Lease agreement between JMK :Ltd ( Lessor )…
A: Present value of all lease Payments will be Present value of MLP
Q: Exercise 15-10 (Algo) Lessor calculation of annual lease payments; lessee calculation of asset and…
A: lease - It is a contract between a lessor and a lessee wherein an asset is given to the lessee in…
Q: Requirements: 1) Calculate the amount Wang should record as a leased asset and lease liability. 2)…
A: SOLUTION:- 1. Present value of lease payments = Annual lease payments X Annuity factor for rate of…
Q: Refer to the following lease amortization schedule. The 10 payments are made annually starting with…
A: A lease is a written agreement that indicates the conditions within which a lessor acknowledges to…
Q: January 1 2024 2025 2026 2027 2028 2029 2030 2041 2042 2043 Payments $ 26,500 $ 26,500 $ 26,500 $…
A: "Since you have posted a question with multiple subparts, we will solve the first three sub-parts…
Q: Which of the following lease conditions would result in a finance lease to the lessee?
A: Lease Lease is a contract between two parties where, lessee (user of the asset) pays rental amount…
Q: Each of the four independent situations below describes a sales-type lease in which annual lease…
A: Working Notes: 1. Net investment in the lease = Gross Investment discounted by the interest rate…
Q: Moose purchased a machine for $420,000 and leased it to Acme on January 1, 2021. Lease…
A: • Lease: A lease is an agreement or contract in which one party (lessor) agrees to rent out an asset…
Q: In dicate each of the following statements as true or false. 1.→Lease Term refers to the fixed and…
A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…
Q: LEASES PROBLEM L Lessor Company and Lessee Company agreed to a lease. The lessor’s cost of the…
A: Lease discounted at 5% Year Lease Payment($) Discounting factor (5%) Present Value ($)…
Q: ok nt ences A finance lease agreement calls for quarterly lease payments of $7,056 over a 10-year…
A: Required A: Partial Amortization TableDateLease PaymentEffective InterestDecrease in…
Q: The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and…
A: Solution Working note - Present value of minimum lease payment = (Annual lease Payment *PVAD for 9%…
Q: Determine the present value of the lease payments Prepare an amortization table for the lease…
A: Implicit rate of interest to be taken if it is readily available If not incremental borrowing rate…
Q: The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and…
A: Journal entry: It is the first step of recording transactions of a company. Before this, no other…
Q: A active lease involves obligations that are not evenly distributed over the lease period. That the…
A: Given, Payment in first year $14000 total payments over the five-year lease term $120000…
Lease term (years) | 4 | 4 | 4 | 4 |
Asset’s useful life (years) | 6 | 5 | 6 | 6 |
Asset’s fair value | $44,000 | $45,000 | $41,000 | $38,000 |
Purchase option that is reasonably | ||||
certain to be exercised? | No | Yes | No | No |
Annual lease payments | Beg. of yr. | End of yr. | Beg. of yr. | End of yr. |
Lessor’s implicit rate (known by lessee) | 5% | 6% | 5% | 6% |
Lessee’s incremental borrowing rate | 5% | 5% | 5% | 5% |
Each of the four independent situations above describes a lease requiring annual lease payments of $10,000. For each situation, determine the appropriate lease classification by the lessee. (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.)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 6 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- 2...new.continue...c The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Crane Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $104,218 Residual value of equipment at end of lease term, guaranteed by the lessee $51,000 Expected residual value of equipment at end of lease term $46,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, $540,000 Lessor’s implicit rate 9 % Lessee’s incremental borrowing rate 9 % 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. Suppose Crane received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? Right-of-use asset $enter a…Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the begin of each year. The lessee is aware of the lessor's implicit rate of return. 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) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value. Guaranteed fair value Situation 1 Situation 2 Situation 3 Situation 4 Lease Payments $ $ 13,907 2,404,814 1 $ $ $ 6 9% $ 68,000 $ 68,000 0 0 $ 0 0 2 Residual Value PV of Lease Guarantee Payments Situation $368,000 $368,000 9 10% $ 68,000 0 68,000 $ 339,161 $ $ 3 Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record a right-of-use asset and a lease liability, for…PROBLEM 10: LEASE MODIFICATION WITH EXTENSION of lease term Laze Company entered into a lease agreement for a stall space for its products on January 1, 2020. Some of the agreement in the lease contract are as follows: Annual rental payable at end of each year starting December 31, 2020 P350,000 Lease term 6 years Implicit interest rate in the lease 10% Laze Company proposed an amendment on the original lease contract on January 1, 2023, and was approved by the lessor. The amendment is to extend the lease term for another 2 years with the following additional features: Annual rental payable at end of each year starting December 31, 2023 P350,000 Implicit interest rate in the lease 11% REQUIRED:: Prepare table of amortization and journal entries for the entire lease term.
- Problem 15-9 (Algo) Lease concepts; sales-type leases; guaranteed and unguaranteed residual value [LO15-2, 15-6] Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: eaved Each of the four independent situations below describes a sales-type lease in which annual lease payments of $16,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Guaranteed by lessee. Unguaranteed Purchase option: After (years) Exercise price. Reasonably certain? 1 4 4 11% e e none n/a n/a Situation 2 4 5 11% $ 6,400 0 www www 3 $8,200 no 3 4 5 11% $3,200 $3,200 $2,200 no Next 4 4 7 11% Save & Exit Submit 8 $.6,400 $4,200 yes Activate WindowsBNM Itd. Acquired on asset of Rs. 440,000 through a finance lease agreement pn 1-1-2018 with no residual value. The lease term is five years with annual lease rentals of Rs. 100,000 payable at the start of each year. The implicit rate of interest is 10%. Calculate: al Gross investment in lease b. Net investment in lease C. Uneared finance income Lease amortization schedule d.Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Situation 1 2 3 4 Lease term (years) Lessor's rate of return Fair value of lease asset 5 10% 8 11% 6 9% 9 12% $ 57,000 $ 357,000 Lessor's cost of lease asset $ 57,000 $ 357,000 $ 82,000 $ 52,000 $ 472,000 $ 472,000 0 $ 57,000 $ 14,000 $ 29,000 e 0 $ 14,000 $ 34,000 Residual value: Estimated fair value Guaranteed fair value Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest…
- Each of the four independent situations below describes a finance lease in which annual lease payments are pay- able at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. Situation Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value 1 4 10% $50,000 $50,000 0 2 7 11% $350,000 $350,000 $ 50,000 0 3 5 9% $75,000 $45,000 $7,000 $7,000 Required: For each situation, determine: a. The amount of the annual lease payments as calculated by the lessor. b. The amount the lessee would record as a right-of-use asset and a lease liability. 4 8 12% $465,000 $465,000 10 $ 45,000 $ 50,000Each of the four independent situations below describes a sales-type lease in which annual lease payments a at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, $1) (Use appropriate factor(s) from the tables provided.) Situation 1 2 3 Lease term (years) 7 7 8 Lessor's and lessee's interest rate Residual value: 8 128 98 11% 10% Estimated fair value 0 $50,000 $8,000 $50,000 Guaranteed by lessee 0 0 $8,000 $60,000 Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers dollar amount.) Situation 2 A The lessor's: 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4. Lease payments 5. Right-of-use asset 6. Lease payable BDate of lease – 7/1/19 Term – 3 years (expires 7/1/22) Semi-annual lease payments of $100,000 every 7/1 and 1/1 Lessee’s incremental borrowing rate – 6% Lessor’s implicit rate of return – 5% (NOT known to lessee) Lessor’s cost of asset leased - $250,000 Guaranteed residual value - $70,000 (lessee believes fair value of the asset at the end of the lease will be greater than $70,000). Lessee and Lessor both have a December 31st Requirements: Assume the lease is treated as a finance lease: Determine the present value of the lease payments Prepare an amortization table for the lease payments for the lessee Determine the fair value of the lease from the lessor’s perspective Prepare the lessor’s amortization table for this lease
- es aw 11 Exercise 15-24 (Algo) Calculation of annual lease payments; residual value [LO15-2, 15-6] Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. 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) Lease term (years) Lessor's rate of return Fair value of lease asset Lessor's cost of lease asset Residual value: Estimated fair value Guaranteed fair value S Situation 1 Situation 2 Situation 3 Situation 4 X 3 Lease Payments $ E D C Residual Value Guarantee 70,000 $ $ $ $ R $ 70,000 $ 70,000 F Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. Note: Round your answers to the nearest whole dollar amount.…Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $1,500 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Effective Decrease in Outstanding Payment Payment Interest Balance Balance 40,860 31,960 24,978 17,577 9,731 ?? 0 1 2 3 4 5 6 8,900 8,900 8,900 8,900 8,900 1,500 Multiple Choice $46,000 ?? 1,918 1,499 1,055 What is the total interest paid over the term of the lease? $2.760 ?? 85 ?? 6,982 7,401 7,845 ?? 1,415On January 1, 2020, Yuri Company leased a machine with Problem 11-6 (IFRS) the following information: 100,000 Annual rental payable at the end of each year 5 years Lease term Implicit rate in the lease Present value of an ordinary annuity of 1 at 6% for 5 periods 6% 4.2124 On January 1, 2022, Yuri Company and the lessor agreed to amend the original terms of the lease by reducing the annuol lease payment by P20,000 and increasing the implicit rate to 8%. The present value of an ordinary annuity of 1 at 8% for 3 periods is 2.5771. Required: 1. Prepare the table of amortization for 2020 and 2021. 2. Prepare journal entries for 2020. 3. Remeasure the lease liability on January 1, 2022. 4. Prepare the table of amortization for 2022, 2023 and 2024. 5. Prepare the journal entries for 2022.
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)