The classification of lease and the accounting treatment. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the equipment is $449,999. Interest rate is 10% Annual lease payments are $129,056 Lessee depreciates the asset on SLM basis.

Question

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Answer 1

Question

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessor.

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Subject: Financial Accounting

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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)

Answer 2

Question

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessor.

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Answer 3

Question

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessor.

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Answer 4

Question

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessor.

Expert Solution & Answer

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Answer 5

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

c.

To determine

To prepare: The journal entries for the lessee.

d.

To determine

To prepare: The journal entries for the lessor.

Answer 6

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

Answer 7

Chapter 18, Problem 18.9E

a.

To determine

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

Answer 8

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

Answer 9

b.

To determine

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%

Answer 10

c.

To determine

To prepare: The journal entries for the lessee.

Answer 11

c.

To determine

To prepare: The journal entries for the lessee.

Answer 12

d.

To determine

To prepare: The journal entries for the lessor.

Answer 13

d.

To determine

To prepare: The journal entries for the lessor.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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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 and the accounting treatment. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the equipment is $449,999. Interest rate is 10% Annual lease payments are $129,056 Lessee depreciates the asset on SLM basis.

The classification of lease and the accounting treatment. Given information: Lease term is 4 years. Economic life of asset is 4 years. Fair value of the equipment is $449,999. Interest rate is 10% Annual lease payments are $129,056 Lessee depreciates the asset on SLM basis.

To prepare: The amortization table. Given information: Lease term is 4 years. Fair value of the asset is $449,999. Interest rate is 10%

To prepare: The journal entries for the lessee.

To prepare: The journal entries for the lessor.

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Chapter 18 Solutions

The classification of lease and the accounting treatment.

Given information:

Lease term is 4 years.

Economic life of asset is 4 years.

Fair value of the equipment is $449,999.

Interest rate is 10%

Annual lease payments are $129,056

Lessee depreciates the asset on SLM basis.

To prepare: The amortization table.

Given information:

Lease term is 4 years.

Fair value of the asset is $449,999.

Interest rate is 10%