a.
The classification of lease for lessee.
Given information:
For the year 2016,
Lease term is 6 years.
Economic life of equipment is 8 years.
Asset is not specialized in nature.
Contract does not contain a purchase option.
Fair value of the asset is $950,000.
Implicit interest rate is 8%
Annual lease payments are $190,000 due on Jan/1 each year.
b.
To prepare: The
Given information:
For the year 2016,
Lease term is 6 years.
Economic life of equipment is 8 years.
Asset is not specialized in nature.
Contract does not contain a purchase option.
Fair value of the asset is $950,000.
Implicit interest rate is 8%
Annual lease payments are $190,000 due on Jan/1 each year.
c.
To prepare: The amortization tables for the finance lease transactions.
Given information:
For the year 2016,
Lease term is 6 years.
Economic life of equipment is 8 years.
Asset is not specialized in nature.
Contract does not contain a purchase option.
Fair value of the asset is $950,000.
Implicit interest rate is 8%
Annual lease payments are $190,000 due on Jan/1 each year.
d.
To prepare: The journal entries for the lessee for end of year one and for second year payment.
Given information:
For the year 2016,
Lease term is 5 years.
Economic life of equipment is 5 years.
Contract does not contain a purchase option.
Fair value of the asset is $275,000.
Implicit interest rate is 5%
Annual lease payments are $57,900 due on Jan/1 each year.
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Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
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