Lease Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’. A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons: Long term lease do not require speedy payment of cash. The rental payment for lease is entirely tax deductible. The lease rent is lesser than the short term lease. Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds. Effective interest rate of amortization bond Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate. To prepare: lease amortization schedule for EL Company

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Answer 1

Question

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

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Answer 2

Question

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

Answer 6

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

Answer 7

Chapter 15, Problem 15.4E

To determine

Lease

Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

A company would lease a long term asset rather than going for buying or issuing long term bonds for the following reasons:

Long term lease do not require speedy payment of cash.

The rental payment for lease is entirely tax deductible.

The lease rent is lesser than the short term lease.

Therefore, company would favor opting for a leasing as a long-term asset rather than buy it or issue long-term bonds.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To prepare: lease amortization schedule for EL Company

Answer 8

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

Answer 9

To determine

To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

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To Prepare: the appropriate journal entries for EL Company from the beginning of lease through January 1, 2016

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