The classification of lease for lessee. Given information: Lease term is 3 years. Economic life of asset is 3 years. Contract does not contain a purchase option. Title is not transferable at the end of the lease term. Fair value of the asset is $105,000. Interest rate is 5% Annual lease payments are $36,272 Lessee depreciates the asset on SLM basis.

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Answer 1

Question

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

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Answer 2

Question

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Expert Solution & Answer

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Answer 3

Question

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Expert Solution & Answer

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Answer 4

Question

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Expert Solution & Answer

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Answer 5

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Answer 6

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Answer 7

Chapter 18, Problem 18.5E

a.

To determine

The classification of lease for lessee.

Given information:

Lease term is 3 years.

Economic life of asset is 3 years.

Contract does not contain a purchase option.

Title is not transferable at the end of the lease term.

Fair value of the asset is $105,000.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Answer 8

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Answer 9

b.

To determine

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 18 - Does the lessee become the owner of the equipment...Ch. 18 - Prob. 18.2Q Ch. 18 - Prob. 18.3Q Ch. 18 - What are typical terms and provisions in a lease...Ch. 18 - How does a lease offer business and financial...Ch. 18 - Prob. 18.6Q Ch. 18 - How is the right-of-use asset measured?Ch. 18 - What components are included in a lease contract?Ch. 18 - How does a lessee separate lease and nonlease...Ch. 18 - How does a lessor separate lease and nonlease...

Solution Summary: The author explains that lease is a long term rent agreement between two parties that is often clubbed with other clauses relating to maintenance or sale at the end of the lease period.

Concept explainers

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To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.

Want to see the full answer?

Chapter 18 Solutions

Solution Summary: The author explains that lease is a long term rent agreement between two parties that is often clubbed with other clauses relating to maintenance or sale at the end of the lease period.

Concept explainers

Videos

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term. Given information: Lease term is 3 years. Interest rate is 5% Annual lease payments are $36,272 Lessee depreciates the asset on SLM basis.

Want to see the full answer?

Chapter 18 Solutions

To prepare: The journal entries for the lessee and supporting amortization tables to account for this agreement over the lease term.

Given information:

Lease term is 3 years.

Interest rate is 5%

Annual lease payments are $36,272

Lessee depreciates the asset on SLM basis.