The initial measurement of right of use asset and lease liability. Given information: Lease term is 7 years. Annual rentals are $40,000 on 1/Jan each year. Implicit rate is 3.5%. Prepaid rent is $40,000. Incentive received is $15,000. Initial direct cost to lessee is $5,000.

Question

Want to see the full answer?

Answer 1

Question

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What was the overall fixed manufacturing overhead budget variance for the month?

What is the total assets turnover on these financial accounting question?

How much the cost per machine hours? Accounting

Answer 2

Question

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Answer 6

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Answer 7

Chapter 18, Problem 18.9E

a.

To determine

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Answer 8

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Answer 9

b.

To determine

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Answer 10

Expert Solution & Answer

Answer 11

Expert Solution & Answer

Answer 12

Want to see the full answer?

Check out a sample textbook solution

See solution

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...

The initial measurement of right of use asset and lease liability. Given information: Lease term is 7 years. Annual rentals are $40,000 on 1/Jan each year. Implicit rate is 3.5%. Prepaid rent is $40,000. Incentive received is $15,000. Initial direct cost to lessee is $5,000.

Solution Summary: The author explains the calculation of lease liability and right of use asset. Journalizing is the process of recording the transactions of an organization in a chronological order.

Concept explainers

Videos

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

Want to see the full answer?

Chapter 18 Solutions

The initial measurement of right of use asset and lease liability. Given information: Lease term is 7 years. Annual rentals are $40,000 on 1/Jan each year. Implicit rate is 3.5%. Prepaid rent is $40,000. Incentive received is $15,000. Initial direct cost to lessee is $5,000.

Solution Summary: The author explains the calculation of lease liability and right of use asset. Journalizing is the process of recording the transactions of an organization in a chronological order.

Concept explainers

Videos

The initial measurement of right of use asset and lease liability. Given information: Lease term is 7 years. Annual rentals are $40,000 on 1/Jan each year. Implicit rate is 3.5%. Prepaid rent is $40,000. Incentive received is $15,000. Initial direct cost to lessee is $5,000.

To prepare: The journal entries for the lease transactions. Given information: Lease term is 7 years. Annual rentals are $40,000 on 1/Jan each year. Implicit rate is 3.5%. Prepaid rent is $40,000. Incentive received is $15,000. Initial direct cost to lessee is $5,000.

Want to see the full answer?

Chapter 18 Solutions

The initial measurement of right of use asset and lease liability.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.

To prepare: The journal entries for the lease transactions.

Given information:

Lease term is 7 years.

Annual rentals are $40,000 on 1/Jan each year.

Implicit rate is 3.5%.

Prepaid rent is $40,000.

Incentive received is $15,000.

Initial direct cost to lessee is $5,000.