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In: Accounting
Exercise 21-10 (Part Level Submission) The following facts pertain to a non-cancelable lease agreement between Sandhill...
Exercise 21-10 (Part Level Submission)
The following facts pertain to a non-cancelable lease agreement
between Sandhill Leasing Company and Teal Mountain Company, a
lessee.
| Commencement date | May 1, 2020 | ||
| Annual lease payment due at the beginning of | |||
| each year, beginning with May 1, 2020 | $19,656.69 | ||
| Bargain purchase option price at end of lease term | $7,000 | ||
| Lease term | 5 | years | |
| Economic life of leased equipment | 10 | years | |
| Lessor’s cost | $65,000 | ||
| Fair value of asset at May 1, 2020 | $93,000 | ||
| Lessor’s implicit rate | 6 | % | |
| Lessee’s incremental borrowing rate | 6 | % |
The collectibility of the lease payments by Sandhill is
probable.
c. Prepare a lease amortization schedule for Rode for the 5-year lease term.
d. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2020 and 2021. Rode's annual accounting period ends on December 31. Reversing entries are used by Rode.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Exercise 21-8 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Culver...
Exercise 21-8 (Part Level Submission)
The following facts pertain to a noncancelable lease agreement
between Culver Leasing Company and Larkspur Company, a lessee.
Inception date:
May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2017
$21,763.30
Bargain-purchase option price at end of lease term
$4,200
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$61,000
Fair value of asset at May 1, 2017
$95,000
Lessor’s implicit rate
9...
Exercise 21-11 The following facts pertain to a non-cancelable lease agreement between Teal Mountain Leasing Company...
Exercise 21-11
The following facts pertain to a non-cancelable lease agreement
between Teal Mountain Leasing Company and Sandhill Company, a
lessee.
Commencement date
May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020
$17,225.30
Bargain purchase option price at end of lease term
$4,000
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$55,000
Fair value of asset at May 1, 2020
$77,000
Lessor’s implicit rate
8
%...
Exercise 21A-10 a-d The following facts pertain to a non-cancelable lease agreement between Cullumber Leasing Company...
Exercise 21A-10 a-d
The following facts pertain to a non-cancelable lease agreement
between Cullumber Leasing Company and Marin Company, a
lessee.
Commencement date
May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2017
$19,656.69
Bargain purchase option price at end of lease term
$7,000
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$65,000
Fair value of asset at May 1, 2017
$93,000
Lessor’s implicit rate
6
%...
Problem 21-01 The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and...
Problem 21-01
The following facts pertain to a non-cancelable lease agreement
between Faldo Leasing Company and Splish Company, a lessee.
Commencement date
January 1,
Annual lease payment due at the beginning of
each year, beginning with January 1,
$99,118
Residual value of equipment at end of lease term,
guaranteed by the lessee
$53,000
Expected residual value of equipment at end of lease term
$48,000
Lease term
6
years
Economic life of leased equipment
6
years
Fair value of asset at...
Problem 21-01 The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and...
Problem 21-01
The following facts pertain to a non-cancelable lease agreement
between Faldo Leasing Company and Kingbird Company, a lessee.
Commencement date
January 1,
Annual lease payment due at the beginning of
each year, beginning with January 1,
$107,198
Residual value of equipment at end of lease term,
guaranteed by the lessee
$50,000
Expected residual value of equipment at end of lease term
$45,000
Lease term
6
years
Economic life of leased equipment
6
years
Fair value of asset at...
Assume that the following facts pertain to a non-cancelable lease agreement between Coco Inc. and Bubs,...
Assume that the following facts pertain to a non-cancelable
lease agreement between Coco Inc. and Bubs, Corp, a Lessee.
Inception date
January 1, 2017
Residual value of equipment at end of lease term,
unguaranteed
$50,000
Lease term
6 years
Economic life of leased equipment
8 years
Fair value of asset at January 1, 2017
$400,000
Lessor’s implicit rate
12%
Lessee’s incremental borrowing rate
10%
The lessee assumes responsibility for all executory costs, which
are expected to amount to $2,000 per...
Assume that the following facts pertain to a non-cancelable lease agreement between Coco Inc. and Bubs,...
Assume that the
following facts pertain to a non-cancelable lease agreement between
Coco Inc. and Bubs, Corp, a Lessee.
Inception date
January 1, 2017
Residual value of
equipment at end of lease term, unguaranteed
$50,000
Lease term
6 years
Economic life of
leased equipment
8 years
Fair value of asset at
January 1, 2017
$400,000
Lessor's implicit
rate
12%
Lessee's incremental
borrowing rate
10%
The lessee assumes
responsibility for all executory costs, which are expected to
amount to $2,000 per...
Assume that the following facts pertain to a non-cancelable lease agreement between Coco Inc. and Bubs...
Assume that the following facts pertain to a non-cancelable
lease agreement between Coco Inc. and Bubs Corp, a Lessee.
Inception date January 1, 2018
Residual value of equipment at end of lease term, unguaranteed
$100,000
Lease term 6 years
Economic life of leased equipment 8 years
Fair value of asset at January 1, 2017 $800,000
Lessor’s implicit rate 12%
Lessee’s incremental borrowing rate 10%
The lessee assumes responsibility for all executory costs, which
are expected to amount to $4,000 per...
Question 12 The following facts pertain to a non-cancelable lease agreement between Shamrock Leasing Company and...
Question 12
The following facts pertain to a non-cancelable lease agreement
between Shamrock Leasing Company and Pharoah Company, a
lessee.
Commencement date
May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020
$17,865.02
Bargain purchase option price at end of lease term
$7,000
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$65,000
Fair value of asset at May 1, 2020
$85,000
Lessor’s implicit rate
6
%
Lessee’s...
Question 12 The following facts pertain to a non-cancelable lease agreement between Shamrock Leasing Company and...
Question 12
The following facts pertain to a non-cancelable lease agreement
between Shamrock Leasing Company and Pharoah Company, a lessee.
Commencement date
May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020
$17,865.02
Bargain purchase option price at end of lease term
$7,000
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$65,000
Fair value of asset at May 1, 2020
$85,000
Lessor’s implicit rate
6
%
Lessee’s...
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