Question
In: Accounting
George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases...
George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $299,140, and its unguaranteed residual value at the end of the lease term is estimated to be $20,000. National will pay annual payments of $40,000 at the beginning of each year and all maintenance, insurance, and taxes. George incurred costs of $180,000 in manufacturing the equipment and $4,000 in negotiating and closing the lease. George has determined that the collectibility of the lease payments is reasonably predictable, that no additional costs will be incurred, and that the implicit interest rate is 8%.
Instructions
(a) Discuss the nature of this lease in relation to the lessor and compute the amount of each of the following items.
(1) Lease receivable.
(2) Sales price.
(3) Cost of sales.
(b) Prepare a 10-year lease amortization schedule. please state how you get to the values
(c) Prepare all of the lessor’s journal entries for the first year.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases...
George Company manufactures a check-in kiosk with an estimated
economic life of 12 years and leases it to National Airlines for a
period of 10 years. The normal selling price of the equipment is
$299,140, and its unguaranteed residual value at the end of the
lease term is estimated to be $20,000. National will pay annual
payments of $40,000 at the beginning of each year and all
maintenance, insurance, and taxes. George incurred costs of
$180,000 in manufacturing the equipment...
George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases...
George Company manufactures a check-in kiosk with an estimated
economic life of 12 years and leases it to National Airlines for a
period of 10 years. The normal selling price of the equipment is
$299,140, and its unguaranteed residual value at the end of the
lease term is estimated to be $20,000. National will pay annual
payments of $40,000 at the beginning of each year and all
maintenance, insurance, and taxes. George incurred costs of
$180,000 in manufacturing the equipment...
Grouper Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases...
Grouper Company manufactures a check-in kiosk with an estimated
economic life of 12 years and leases it to Monty Airlines for a
period of 10 years. The normal selling price of the equipment is
$255,322, and its unguaranteed residual value at the end of the
lease term is estimated to be $20,600. Monty will pay annual
payments of $36,600 at the beginning of each year. Grouper incurred
costs of $179,000 in manufacturing the equipment and $3,800 in
sales commissions in...
Concord Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases...
Concord Company manufactures a check-in kiosk with an estimated
economic life of 12 years and leases it to National Airlines for a
period of 10 years. The normal selling price of the equipment is
$318,274, and its unguaranteed residual value at the end of the
lease term is estimated to be $18,100. National will pay annual
payments of $39,500 at the beginning of each year. Concord incurred
costs of $182,900 in manufacturing the equipment and $3,900 in
sales commissions in...
Windsor Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases...
Windsor Company manufactures a check-in kiosk with an
estimated economic life of 12 years and leases it to National
Airlines for a period of 10 years. The normal selling price of the
equipment is $262,268, and its unguaranteed residual value at the
end of the lease term is estimated to be $21,400. National will pay
annual payments of $36,200 at the beginning of each year. Windsor
incurred costs of $177,800 in manufacturing the equipment and
$4,400 in sales commissions in...
Question 1 Bonita Company manufactures a check-in kiosk with an estimated economic life of 12 years...
Question 1 Bonita Company manufactures a check-in kiosk with an
estimated economic life of 12 years and leases it to Windsor
Airlines for a period of 10 years. The normal selling price of the
equipment is $299,140, and its unguaranteed residual value at the
end of the lease term is estimated to be $20,000. Windsor will pay
annual payments of $40,000 at the beginning of each year. Bonita
incurred costs of $180,000 in manufacturing the equipment and
$40,000 in sales...
Question 8 Nash Company manufactures a check-in kiosk with an estimated economic life of 12 years...
Question 8 Nash Company manufactures a check-in kiosk with an
estimated economic life of 12 years and leases it to Crane Airlines
for a period of 10 years. The normal selling price of the equipment
is $255,322, and its unguaranteed residual value at the end of the
lease term is estimated to be $20,600. Crane will pay annual
payments of $36,600 at the beginning of each year. Nash incurred
costs of $179,000 in manufacturing the equipment and $3,800 in
sales...
Problem 21A-9 a2-c Whispering Company manufactures a check-in kiosk with an estimated economic life of 12...
Problem 21A-9 a2-c
Whispering Company manufactures a check-in kiosk with an
estimated economic life of 12 years and leases it to National
Airlines for a period of 10 years. The normal selling price of the
equipment is $298,352, and its unguaranteed residual value at the
end of the lease term is estimated to be $18,300. National will pay
annual payments of $40,000 at the beginning of each year.
Whispering incurred costs of $185,300 in manufacturing the
equipment and $3,700 in...
CHL Corporation manufactures specialty equipment with an estimated economic life of 12 years and leases it...
CHL Corporation manufactures specialty equipment with an
estimated economic life of 12 years and leases it to Provincial
Airlines Corp. for a period of 10 years. Both CHL and Provincial
Airlines follow ASPE. The equipment’s normal selling price is
$210,482 and its unguaranteed residual value at the end of the
lease term is estimated to be $15,000. Provincial Airlines will
make annual payments of $25,000 at the beginning of each year and
pay for all maintenance and insurance. CHL incurred...
Amirante SA manufactures a CT scanner with an estimated life of 12 years and leases it...
Amirante SA manufactures a CT scanner with an estimated life of
12 years and leases it to Chambers Medical Center for a period of
10 years. The normal selling price of the machine is $2,000,000,
and its guaranteed residual value at the end of the lease term is
$300,000. The hospital will pay equal rentals at the beginning of
each year starting January 1, 2019. The machine has a cost of
$1,200,000 on Amirante’s books on January 1, 2019. Amirante...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Methanol is synthesized by the gas phase reaction: Stoichiometric amounts of CO and H2 are mixed...
- write a script in ruby to automate user account creation in Linux using a CSV file....
- Your firm is contemplating the purchase of a new $540,000 computer-based order entry system. The system...
- design a divide & conquer alogrithm that requires 2 recursive calls for array size greater than...
- Problem 8 ( please answer neatly ) a) Draw the dc-motor equivalent circuit and its representation...
- Write a C++ program that will output the multiplication table as show below: 1*1=1 2*1=2  
- Purpose of Assignment The purpose of this assignment is to allow students the opportunity to research...
ADVERTISEMENT