Question
In: Accounting
Cullumber Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2020,...
Cullumber Corporation, which uses ASPE, enters into a 6-year lease of equipment on September 1, 2020, that requires 6 annual payments of $38,000 each, beginning September 1, 2020. In addition, Cullumber guarantees the lessor a residual value of $27,000 at lease end. The equipment has a useful life of seven years.
Using (1) tables, (2) a financial calculator, or (3) Excel
functions, calculate the amount of the capital lease and prepare
Cullumber’s September 1, 2020 journal entry assuming an interest
rate of 12%. (Credit account titles are automatically
indented when the amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts. Round factor values to 5 decimal places,
e.g. 1.25124 and final answers to 0 decimal places, e.g.
5,275.)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Pina Corporation enters into a 6-year lease of equipment on January 1, 2017, which requires 6...
Pina Corporation enters into a 6-year lease of equipment on
January 1, 2017, which requires 6 annual payments of $38,200 each,
beginning January 1, 2017. In addition, Pina guarantees the lessor
a residual value of $18,500 at lease-end. The equipment has a
useful life of 7 years. Assume that for Lost Ark Company, the
lessor, collectibility is reasonably predictable, there are no
important uncertainties concerning costs, and the carrying amount
of the equipment is $208,718.
Prepare Lost Ark’s January 1,...
Coronado Corporation enters into a 6-year lease of equipment on January 1, 2017, which requires 6...
Coronado Corporation enters into a 6-year lease of equipment on
January 1, 2017, which requires 6 annual payments of $39,000 each,
beginning January 1, 2017. In addition, Coronado guarantees the
lessor a residual value of $20,300 at lease-end. The equipment has
a useful life of 6 years. Prepare Coronado’ January 1, 2017,
journal entries assuming an interest rate of 11%. (Credit account
titles are automatically indented when amount is entered. Do not
indent manually. If no entry is required, select...
Windsor Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6...
Windsor Corporation enters into a 6-year lease of equipment on
December 31, 2019, which requires 6 annual payments of $37,900
each, beginning December 31, 2019. In addition, Windsor guarantees
the lessor a residual value of $18,800 at the end of the lease.
However, Windsor believes it is probable that the expected residual
value at the end of the lease term will be $8,800. The equipment
has a useful life of 6 years. Assume that for Lost Ark Company, the
lessor,...
Kingbird Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6...
Kingbird Corporation enters into a 6-year lease of equipment on
December 31, 2019, which requires 6 annual payments of $37,400
each, beginning December 31, 2019. In addition, Kingbird guarantees
the lessor a residual value of $22,000 at the end of the lease.
However, Kingbird believes it is probable that the expected
residual value at the end of the lease term will be $12,000. The
equipment has a useful life of 6 years. Assume that for Lost Ark
Company, the lessor,...
Metlock Corporation enters into a 6-year lease of equipment on December 31, 2016, which requires 6...
Metlock Corporation enters into a 6-year lease of equipment on
December 31, 2016, which requires 6 annual payments of $37,100
each, beginning December 31, 2016. In addition, Metlock guarantees
the lessor a residual value of $20,900 at the end of the lease.
However, Metlock believes it is probable that the expected residual
value at the end of the lease term will be $10,900. The equipment
has a useful life of 6 years. Assume that for Lost Ark Company, the
lessor,...
Concord Corporation enters into a 6-year lease of equipment on December 31, 2016, which requires 6...
Concord Corporation enters into a 6-year lease of equipment on
December 31, 2016, which requires 6 annual payments of $37,100
each, beginning December 31, 2016. In addition, Concord guarantees
the lessor a residual value of $20,900 at the end of the lease.
However, Concord believes it is probable that the expected residual
value at the end of the lease term will be $10,900. The equipment
has a useful life of 6 years.
Prepare Concords' December 31, 2016, journal entries assuming...
Cullumber Company, as lessee, enters into a lease agreement on July 1, 2021, for equipment. The...
Cullumber Company, as lessee, enters into a lease agreement on
July 1, 2021, for equipment. The following data are relevant to the
lease agreement:
1.
The term of the noncancelable lease is 4 years, with
no renewal option. Payments of $855,212 are due on
July 1 of each year.
2.
The fair value of the equipment on July 1, 2021 is $3,020,000.
The equipment has an economic life of 6 years with
no salvage value.
3.
Cullumber depreciates similar machinery...
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....
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....
Krause Company on January 1, 2020, enters into a five-year noncancelable lease for equipment having an...
Krause Company on January 1, 2020, enters into a five-year
noncancelable lease for equipment having an estimated useful life
of 6 years and a fair value to the lessor, Daly Corp., at the
inception of the lease of $4,000,000. The cost to manufacture the
equipment was $3,000,000. Daly’s required rate of return is 8%.
Krause’s incremental borrowing rate is 10% and is aware of Daly’s
required rate of return. Krause uses the straight-line method to
amortize its assets. Daly is...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Cara Ryder managers a ski school in a large resort and is trying to develop a...
- 1. Like most senses, the neurons that carry that carry the somatic sensations [touch, vibration, two-point...
- Explain how the Court has at times allowed the restriction of the civil rights of minority...
- 1. How do psychoanalytic and behavioral interpretations of childhood experience differ? 2. How does selective attention...
- Procter & Gamble Embraces Continuous Planning and Execution The Procter & Gamble Company (P&G) is an...
- Explain what a project is amd how priject management can contribute to an organization. Briefly outline...
- Instructions: Each of the following scenarios illustrates one of Freud’s defense mechanisms from the list below....
ADVERTISEMENT