a.
The classification of lease for lessee.
Given information:
Lease term is 7 years.
Economic life of equipment is 10 years.
Fair value of the asset is $1,700,479.
Carrying value of asset is $1,500,000.
Residual value guaranteed by third party is $100,000.
Interest rate is 9%
Annual lease payments are $300,000 due on Jan/1 each year
b.
To prepare: Amortization tables for the lease term.
Given information:
Lease term is 7 years.
Economic life of equipment is 10 years.
Fair value of the asset is $1,700,479.
Carrying value of asset is $1,500,000.
Residual value guaranteed by third party is $100,000.
Interest rate is 9%
Annual lease payments are $300,000 due on Jan/1 each year
c.
To prepare: The journal entries for the lessee.
Given information:
Lease term is 5 years.
Economic life of equipment is 8 years.
Fair value of the asset is $650,000.
Carrying value of asset is $650,000.
Residual value guaranteed by third party is $100,000.
Initial direct cost to lessee is $10,000.
Interest rate is 10%
Lessor is certain about receipt of lease payments and residual value.
Annual lease payments are $120,000 due on Jan/1 each year
d.
To prepare: The journal entries for the lessee.
Given information:
Lease term is 5 years.
Economic life of equipment is 8 years.
Fair value of the asset is $650,000.
Carrying value of asset is $650,000.
Residual value guaranteed by third party is $100,000.
Initial direct cost to lessee is $10,000.
Interest rate is 10%
Lessor is certain about receipt of lease payments and residual value.
Annual lease payments are $120,000 due on Jan/1 each year
e.
The classification of lease for lessor.
Given information:
Lease term is 7 years.
Economic life of equipment is 10 years.
Fair value of the asset is $1,700,479.
Carrying value of asset is $1,500,000.
Residual value guaranteed by third party is $100,000.
Interest rate is 9%
Annual lease payments are $300,000 due on Jan/1 each year
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Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
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