Question
In: Accounting
Intermediate, Inc. enters into a lease agreement with Irving, LLC to lease an automobile with a...
Intermediate, Inc. enters into a lease agreement with Irving, LLC to lease an automobile with a fair value of $75,000 under a 5-year lease on December 20, 2018. The lease commences on January 1, 2019, and Incentive will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. Incentive made a lease payment of $10,000 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,000, due on January 1 of 2019, 2020, 2021, 2022, and 2023. The implicit rate of the lease is 7% and is known by Intermediate, and Intermediate incurs initial direct costs of $2,000. Required: 1. Determine the type of lease to Intermediate and Irving. 2. Complete any amortization schedule needed. 3. Prepare journal entries needed for the five-year lease for both lessor and lessee.
Solutions
ekkarill92 answered 6 months agoRelated Solutions
Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a...
Leewin Brokerage enters into a lease agreement with Bumble
Motors to lease an automobile with a fair value of $77,000 under a
5−year lease on December 20, 2018. The lease commences on January
1, 2019, and Leewin will return the automobile to Bumble on
December 31, 2023. The automobile has an estimated useful life of
7 years. Leewin made a lease payment of $10,300 on December 20,
2018. In addition, the lease agreement stipulates annual payments
of $10,300, due on...
Poe Inc. enters into a lease agreement as lessor on January 1, 2020, to lease a...
Poe Inc. enters into
a lease agreement as lessor on January 1, 2020, to lease a check-in
kiosk to Nat Airlines. The normal selling price is $991,355. The
term of the noncancelable lease is ten
years and payments
are required at the beginning of each year. The following
information relates to this agreement:
Nat Airlines has the option to purchase the kiosk for $5,000
when the lease expires at which time the fair value is expected to
be $30,000.
The...
DU Journeys enters into an agreement with Traveler Inc. to lease a car on December 31,...
DU Journeys enters
into an agreement with Traveler Inc. to lease a car on December 31,
2016. The following information relates to this agreement.
1. The term of the non-cancelable lease is 3
years with no renewal or bargain purchase option. The remaining
economic life of the car is 3 years, and it is expected to have no
residual value at the end of the lease term.
2. The fair value of the car was $15,000 at
commencement of the lease.
3. Annual...
DU Journeys enters into an agreement with Traveler Inc. to lease a car on December 31,...
DU Journeys enters into an agreement with Traveler Inc. to lease
a car on December 31, 2016. The following information relates to
this agreement. The term of the non-cancelable lease is 3 years
with no renewal or bargain purchase option. The remaining economic
life of the car is 3 years, and it is expected to have no residual
value at the end of the lease term. The fair value of the car was
$15,000 at commencement of the lease. Annual...
MetFast enters into an agreement with Traveler Inc. to lease a car on December 31, 2019....
MetFast enters into an agreement with Traveler Inc. to lease a
car on December 31, 2019. The following information relates to this
agreement.
1.
The term of the non-cancelable
lease is 3 years with no renewal or bargain purchase option. The
remaining economic life of the car is 3 years, and it is expected
to have no residual value at the end of the lease term.
2.
The fair value of the car was
$15,270 at commencement of the lease....
Larkspur enters into an agreement with Traveler Inc. to lease a car on December 31, 2019....
Larkspur enters into an agreement with Traveler Inc. to lease a
car on December 31, 2019. The following information relates to this
agreement.
1.
The term of the non-cancelable
lease is 3 years with no renewal or bargain purchase option. The
remaining economic life of the car is 3 years, and it is expected
to have no residual value at the end of the lease term.
2.
The fair value of the car was
$15,540 at commencement of the lease....
On January 1, 2017, Marlene Corp. enters into an agreement with Dietrich Rentals Inc. to lease...
On January 1, 2017, Marlene Corp. enters into an agreement
with Dietrich Rentals Inc. to lease a machine from them. Both
corporations adhere to ASPE. The following data relate to the
agreement:
1. The term of the non-cancellable lease is three years with
no renewal option. Payments of
$271,622 are due on December 31 of each year.
2. The fair value of the machine on January 1, 2017, is
$700,000. The machine has a remaining economic life of 10 years,...
Exercise 21A-1 a Splish Brothers enters into an agreement with Traveler Inc. to lease a car...
Exercise 21A-1 a Splish Brothers enters into an agreement with
Traveler Inc. to lease a car on December 31, 2016. The following
information relates to this agreement. 1. The term of the
non-cancelable lease is 3 years with no renewal or bargain purchase
option. The remaining economic life of the car is 3 years, and it
is expected to have no residual value at the end of the lease term.
2. The fair value of the car was $14,730 at...
Jay Company, as lessee, enters into a lease agreement on January 1, 2020, to lease equipment....
Jay Company, as lessee, enters into a lease agreement on January
1, 2020, to lease equipment. The following data are relevant to the
lease agreement.
- The term of the noncancellable lease is three years, with no
renewal option. Payments of $12,000 are due on January 1, of each
year.
- The fair value of the equipment on January 1, 2020 is $35,000.
The equipment has an estimated economic life of five years, and an
unguarenteed residual value of $4,000....
Calculation of lease payments Zest Company, as lessee, enters into a lease agreement on January 1,...
Calculation of lease payments
Zest Company, as lessee, enters into a lease agreement on January
1, 2018, to
lease equipment. The following data are relevant to the lease
agreement.
- The term of the noncancellable lease is three years, with no
renewal option.
- The fair value of the equipment on January 1, 2018 is $60,000.
The
estimated residual value is $0.
- The equipment reverts back to the lessor at the termination of
the lease.
- The lessor used...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 1. How are a buffer and a NOT gate similar? 2. How are a buffer and...
- Section 9.4 Practice Problems: 2. How many CSUN students would have to be polled to determine...
- Cybersecuirty Describe the different types of firewalls that are on the market and how they differ...
- Please take time to view the video, “Was America Founded to Be Secular? “ as a...
- 7. A health psychologist knew that corporate executives in general have an average score of 80...
- Submission Guidelines This assignment may be submitted for full credit until Friday, October 4th at 11:59pm....
- Cara Ryder managers a ski school in a large resort and is trying to develop a...
ADVERTISEMENT