Question

In: Accounting

PROBLEM 4 On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from...

PROBLEM 4

On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Brampton to receive annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Brampton accordingly accounts for this lease transaction as a sales type lease. The minimum lease payments were determined to have a present value of $208,493 at an effective interest rate of 10%. Brampton manufactured the equipment f0r $150,000.

  1. Prepare a lease amortization table for 12/31/18, 12/31/19 & 12/31/20.
  2. Record Brampton’s (Lessor) journal entries for 12/31/18 & 12/31/19.

SHOW ALL COMPUTATIONS.

Solutions

Expert Solution


Related Solutions

4.On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The...
4.On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Malton to make annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Malton accordingly accounts for this lease transaction as a finance lease. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Malton to make annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Malton accordingly accounts for this lease transaction as a finance lease. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Brampton to receive annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Brampton accordingly accounts for this lease transaction as a sales type lease....
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Brampton to receive annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Brampton accordingly accounts for this lease transaction as a sales type lease....
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Brampton to receive annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Brampton accordingly accounts for this lease transaction as a sales type lease....
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The...
On Dec 31, 2018, Malton Corporation signed a five-year noncancelable lease for equipment from Brampton. The terms of the lease called for Brampton to receive annual payments of $50,000 each Dec 31, beginning with Dec 31, 2018, for five years with the equipment going back to the lessor at the end of this period. The equipment has an estimated useful life of 5 years and no salvage value. Brampton accordingly accounts for this lease transaction as a sales type lease....
On January 1, Year 1, Dayden Company as lessee signed a five-year noncancelable equipment lease with...
On January 1, Year 1, Dayden Company as lessee signed a five-year noncancelable equipment lease with annual payments of $100,000 beginning December 31, Year 1. Dayden Company treated this transaction as a capital lease. The five lease payments have a present value of $379,000 at January 1, Year 1, based on interest of 10%. What amount should Dayden Company report as interest expense for the year ended December 31, Year 1?
On Dec. 31, 2017, the Eastville City water department leased equipment under a noncancelable lease agreement...
On Dec. 31, 2017, the Eastville City water department leased equipment under a noncancelable lease agreement that transferred title to the city after making seven payments of $ 15,250. The present value (6% interest) of the minimum lease payments is $90,250. Payments are to take place on December 31 beginning in 2017.   Required: Prepare journal entries for 2017 and 2018 assuming the estimated useful life of the equipment is 10 years. (B) Big City provides a defined benefit pension plan...
On January 1, 2017, Cullumber Corporation signed a 5-year noncancelable lease for a machine. The terms...
On January 1, 2017, Cullumber Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Cullumber to make annual payments of $8,200 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $5,500 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Cullumber uses the straight-line method of depreciation for all of its plant...
On january 1, 2017, bridgeport corporation signed a 5-year noncancelable lease for a machine. the terms...
On january 1, 2017, bridgeport corporation signed a 5-year noncancelable lease for a machine. the terms of the lease called for bridgeport to make annual payments of $8,317 at the beginning of each year, starting january 1, 2017. the machine has an estimated useful life of 6 years and a $5,300 unguaranteed residual value. the machine reverts back to the lessor at the end of the lease term. bridgeport uses the straight-line method of depreciation for all of its plant...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT