Chapter 15, Problem 15.4DMP

Use the following Annuity Table for questions. Future Value of Ordinary Annuity of 1 Present Value of an Ordinary Annuity of 1   On January 1, 2015, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. The following information pertains to this lease agreement.  (a) The agreement requires equal rental payments at the beginning each year.  (b) The fair value of the building on January 1, 2015 is $3,000,000; the book value to Holt is also $3,000,000.  (c) The building has an estimated economic life of 10 years, with no residual value Yancey depreciates similar buildings on the straight-line method. (d) At the termination of the lease, the title to the building will be transferred to the lessee. (e) Yancey's incremental borrowing rate is 11% per year. Holt Warehouse…

This is a two part question: 1. List the criteria used for determining if a lease agreement is accounted for as a capital lease. 2. Using the criteria, is the lease described below a capital or operating lease? On January 1, 2017, Burke Corporation signed a 5 year noncancelable lease for a machine. The terms of the lease called for Burke to make annual payments of $8,668 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $5,000 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Burke uses the straight-line method of depreciation for all of its plant assets. Burke's incremental borrowing rate is 10%, and the lessor's implicit rate is unknown.

On July 01, 2011, a company leased a piece of land under a 3-year lease. Total rent for the term of the lease will be P3,600,000 payable as follows. All payments were made when due. How much is the lessor's rent revenue for the fiscal year ended June 30, 2012 suppose it classifies the lease as an operating lease?    Use the same information An amount reported in the lessor's statement of financial position at June 30, 2013 would include      a. P900,000 Unearned Rent b. P900,000 Rent Receivable c. P1,500,000 Unearned Rent d. P1,500,000 Rent Receivable

How much is the interest expense to be recognized for the year 2022(for present value factors, do not round off)?

12. Louis Company leased a machine from Millennium Corporation on January 1, 2010. The first annual payment was made on January 1, 2011. The machine has an economic life of six years. The lease agreement requires four annual payments of P33,000, including P3,000 annual payment for repairs and maintenance. The machine will be returned to Millennium Corporation at the end of the lease term and Louis Company guarantees a residual value of P5,000. Interest implicit in the lease is 10%, which is known to Louis.

Help with parts 4 and 5.  4. Prepare journal entries for Sax for the years 2016 and 2017. 5. Next Level If the lease term is 3 years and the annual payment is $110,000, how would Sax classify the lease under (a) U.S. GAAP and (b) IFRS?

Cabela's Corp disclosed the following minimum rental commitments under non-cancelable operating leases in its 2015 annual report (in millions).   Operating Leases 2016 $ 24,424 2017 25,245 2018 25,065 2019 24,682 2020 24,087 Thereafter 292,668 Total $416,171 What is the approximate present value of the minimum lease payments? Assume a discount rate of 6.0% and round the remaining lease term to the nearest whole year.   A. $233,357 million   B. $ 15,113 million   C. $255,007 million   D. $373,713 million   E. None of the above Do not give answer in image formate

8. On July 1, 2021, Salad Co. signed a 20-year building lease that it reported as a finance lease. Salad paid the monthly lease payments when due. How should Salad report the effect of the lease payments in the financing activities section of its 2021 statement of cash flows? a. An inflow equal to the present value of future lease payments on July 1, 2021, less 2021 principal and interest payments. b. An outflow equal to the 2021 principal payments only. c. The lease payments should not be reported in the financing activities section. d. An outflow equal to the 2021 principal and interest payments on the lease.

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