The classification of lease and the accounting treatment. Given information: Lease term is 10 years. Economic life of asset is 15 years. Fair value of the equipment is $567,548. Interest rate is 5% Annual lease payments are $70,000 Lessee depreciates the asset on SLM basis.

Question

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Answer 1

Question

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

e.

To determine

The type of lease for lessor.

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Answer 2

Question

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

e.

To determine

The type of lease for lessor.

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

e.

To determine

The type of lease for lessor.

Expert Solution & Answer

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Answer 4

Question

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

e.

To determine

The type of lease for lessor.

Expert Solution & Answer

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Answer 5

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

e.

To determine

The type of lease for lessor.

Answer 6

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

Answer 7

Chapter 18, Problem 18.11E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

Answer 8

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

Answer 9

b.

To determine

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

Answer 10

c.

To determine

To prepare: The journal entries for the lessee.

Answer 11

c.

To determine

To prepare: The journal entries for the lessee.

Answer 12

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

Answer 13

d.

To determine

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

Answer 14

e.

To determine

The type of lease for lessor.

Answer 15

e.

To determine

The type of lease for lessor.

Answer 16

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Answer 17

Expert Solution & Answer

Answer 18

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Answer 19

Ch. 18 - Does the lessee become the owner of the equipment...Ch. 18 - Prob. 18.2Q Ch. 18 - Prob. 18.3Q Ch. 18 - Prob. 18.4Q Ch. 18 - Prob. 18.5Q Ch. 18 - Prob. 18.6Q Ch. 18 - Prob. 18.7Q Ch. 18 - Prob. 18.8Q Ch. 18 - Prob. 18.9Q Ch. 18 - Prob. 18.10Q

The classification of lease and the accounting treatment. Given information: Lease term is 10 years. Economic life of asset is 15 years. Fair value of the equipment is $567,548. Interest rate is 5% Annual lease payments are $70,000 Lessee depreciates the asset on SLM basis.

The classification of lease and the accounting treatment. Given information: Lease term is 10 years. Economic life of asset is 15 years. Fair value of the equipment is $567,548. Interest rate is 5% Annual lease payments are $70,000 Lessee depreciates the asset on SLM basis.

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method. Given information: Lease term is 4 years. Fair value of the asset is $449,999. Interest rate is 10%

To prepare: The journal entries for the lessee.

To prepare: The journal entries for the lessee, if it classifies as an operating lease.

The type of lease for lessor.

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Chapter 18 Solutions

The classification of lease and the accounting treatment.

Given information:

Lease term is 10 years.

Economic life of asset is 15 years.

Fair value of the equipment is $567,548.

Interest rate is 5%

Annual lease payments are $70,000

Lessee depreciates the asset on SLM basis.

To prepare: The amortization table for the lessee from 2016 through 2018 using effective interest rate method.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%