The classification of lease. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the asset is $232,511. Carrying value of asset is $200,000. Interest rate is 8% Annual lease payments are $65,000 due on Jan/1 each year

Question

Want to see the full answer?

Answer 1

Question

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

None

For the current year ended March 31, Cosgrove Company expects fixed costs of $579,000, a unit variable cost of $68, and a unit selling price of $89. a. Compute the anticipated break-even sales (units). b. Compute the sales (units) required to realize an operating income of $134,000. (Round your answer to nearest units)

L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs.

Answer 2

Question

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 6

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 7

Chapter 18, Problem 18.2P

a.

To determine

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 8

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

Answer 9

b.

To determine

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

Answer 10

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 11

c.

To determine

To prepare: The journal entries of sales type lease for lessor for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 12

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 13

d.

To determine

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 17

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. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the asset is $232,511. Carrying value of asset is $200,000. Interest rate is 8% Annual lease payments are $65,000 due on Jan/1 each year

The classification of lease. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the asset is $232,511. Carrying value of asset is $200,000. Interest rate is 8% Annual lease payments are $65,000 due on Jan/1 each year

To prepare: The amortization tables for the lease term. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the asset is $232,511. Carrying value of asset is $200,000. Interest rate is 8% Annual lease payments are $65,000 due on January 1 each year

To prepare: The journal entries for the lessee for year one. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the asset is $232,511. Carrying value of asset is $200,000. Interest rate is 8% Annual lease payments are $65,000 due on Jan/1 each year

Want to see the full answer?

Chapter 18 Solutions

The classification of lease.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year

To prepare: The amortization tables for the lease term.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on January 1 each year

To prepare: The journal entries for the lessee for year one.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the asset is $232,511.

Carrying value of asset is $200,000.

Interest rate is 8%

Annual lease payments are $65,000 due on Jan/1 each year