Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 18.3P
a.
To determine
The annual rent payable for recovery of fair value of the asset.
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%
Residual value guaranteed by lessee is $15,000.
Annual lease payments are $65,000 due on Jan/1 each year
b.
To determine
The present value of lease payments.
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%
Residual value guaranteed by lessee is $15,000.
Annual lease payments are $65,000 due on Jan/1 each year
c.
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%
Residual value guaranteed by lessee is $15,000.
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
Students have asked these similar questions
Kindly help me with general accounting question
None
On March 1 of the previous year, a parent sold stock with a cost of
$8,000 to her child for $6,000, its fair market value. On September 30 of
the current year, the child sold the same stock for $7,000 to Smith, who
is unrelated to the parent and child. What is the proper treatment for
these transactions?
a. Parent has a $2,000 recognized loss and child has a $1,000
recognized gain.
b. Parent has a $2,000 recognized loss and child has a $0 recognized
gain.
c. Parent has a $0 recognized loss and child has a $1,000 recognized
gain.
d. Parent has a $0 recognized loss and child has a $0 recognized gain.
Chapter 18 Solutions
Intermediate Accounting
Ch. 18 - Does the lessee become the owner of the equipment...Ch. 18 - Prob. 18.2QCh. 18 - Prob. 18.3QCh. 18 - Prob. 18.4QCh. 18 - Prob. 18.5QCh. 18 - Prob. 18.6QCh. 18 - Prob. 18.7QCh. 18 - Prob. 18.8QCh. 18 - Prob. 18.9QCh. 18 - Prob. 18.10Q
Ch. 18 - Prob. 18.11QCh. 18 - Prob. 18.12QCh. 18 - Prob. 18.13QCh. 18 - Prob. 18.14QCh. 18 - Prob. 18.15QCh. 18 - Prob. 18.16QCh. 18 - Prob. 18.17QCh. 18 - Prob. 18.18QCh. 18 - Prob. 18.19QCh. 18 - Prob. 18.20QCh. 18 - Prob. 18.21QCh. 18 - Prob. 18.22QCh. 18 - Prob. 18.23QCh. 18 - Prob. 18.24QCh. 18 - Prob. 18.1MCCh. 18 - Prob. 18.2MCCh. 18 - Prob. 18.3MCCh. 18 - Prob. 18.4MCCh. 18 - Prob. 18.5MCCh. 18 - Prob. 18.6MCCh. 18 - Prob. 18.7MCCh. 18 - Prob. 18.8MCCh. 18 - Prob. 18.1BECh. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Prob. 18.4BECh. 18 - Prob. 18.5BECh. 18 - Prob. 18.6BECh. 18 - Prob. 18.7BECh. 18 - Prob. 18.8BECh. 18 - Prob. 18.9BECh. 18 - Finance Lease, Lessee, Lessor, Guaranteed Residual...Ch. 18 - Prob. 18.1ECh. 18 - Prob. 18.2ECh. 18 - Prob. 18.3ECh. 18 - Prob. 18.4ECh. 18 - Prob. 18.5ECh. 18 - Prob. 18.6ECh. 18 - Prob. 18.7ECh. 18 - Prob. 18.8ECh. 18 - Prob. 18.9ECh. 18 - Prob. 18.10ECh. 18 - Prob. 18.11ECh. 18 - Prob. 18.12ECh. 18 - Prob. 18.13ECh. 18 - Prob. 18.4PCh. 18 - Prob. 18.5PCh. 18 - Prob. 18.1PCh. 18 - Prob. 18.2PCh. 18 - Prob. 18.3PCh. 18 - Prob. 18.6PCh. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Prob. 2JCCh. 18 - Prob. 1FSACCh. 18 - Prob. 1SSCCh. 18 - Prob. 1BCC
Knowledge Booster
Similar questions
- Allowance for Doubtful Accounts has a debit balance of $2,900 at the end of the year, before adjustments. If an analysis of receivables indicates doubtful accounts of $36,000, what will be the amount of the appropriate adjusting entry? [Need The adjusting entry in Table format]arrow_forwardSiren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2017, the company incurred the following costs. Variable Costs per Unit Direct materials Direct labor $7.95 $ 3.66 $ 6.15 Variable selling and administrative expenses $ 4.13 Variable manufacturing overhead Fixed Costs per Year Fixed manufacturing overhead Fixed selling and administrative expenses $ 2,43,800 $2,22,706 Siren Company sells the fishing lures for $26.50. During 2017, the company sold 80,000 lures and produced 92,000 lures. Assuming the company uses variable costing, calculate Siren's manufacturing cost per unit for 2017.arrow_forwardWhat is company a's net income?arrow_forward
- The Red Martin has annual sales of $797,400, total debt of $320,000, total equity of $475,000, and a profit margin of 5.96 percent. What is the return on assets? (financial Accounting 5 points)arrow_forwardHi expert please give me answer general accountingarrow_forwardA business purchased equipment for $165,000 on January 1, 2021. The equipment will be depreciated over the five years of its estimated useful life using the straight-line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the year 2021? (Assume the residual value of the acquired equipment to be zero.) A) Debit $165,000 to Equipment, and credit $145,000 to Cash. B) Debit $33,000 to Depreciation Expense-Equipment, and credit $33,000 to Accumulated Depreciation-Equipment. C) Debit $165,000 to Depreciation Expense-Equipment, and credit $145,000 to Accumulated Depreciation-Equipment. D) Debit $33,000 to Depreciation Expense, and credit $33,000 to Equipment. Correct optionarrow_forward
- What is bicket's 2013 return on common stockholders' equity?arrow_forwardBodega Chocolate, Inc. is a new company that produces a single product. The company has no beginning inventory. During the year, the company produced 10,000 units out of which 9,000 were sold. Below are Bodega's costs: Variable costs per unit: Production $4.00 Selling and administrative $2.50 Total fixed costs for the year: Production $20,700.00 Selling and administrative $85,000 a) What is the unit product using absorption costing? b) What is the unit product cost using variable costing?arrow_forward1. Net income 750 2. Depreciation 86arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education