Question
In: Accounting
If I was given a question with only the following data: Lease agreement between a manufacturer...
If I was given a question with only the following data:
Lease agreement between a manufacturer and a business who is leasing a piece of equipment with the useful life of eleven years beginning on May/30/2005. Equal payments of 25,250 from the lessee is required at the beginning of each year of this ten-year lease agreement. Included is a guaranteed residual value of 20,000. The equipment's fair value and cost at inception of the lease are one of the same of 185,078. The incremental interest as well as the implicit rate are 9% and the equipment is returned to the manufacturer at the end of this non-cancelable lease. They both use a straight-line-amortization method. Please answer the following questions in steps on how you got the answer and showing the calculations for each step. Please round all final answers to the nearest dollar. 1) What would the journal entries be for the lessor and lessee following ASPE? 2.) Considering this is the only information given would there be a year end at December 31 assumed included in the accounting journals???
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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...
Question 11 The following facts pertain to a non-cancelable lease agreement between Carla Vista Leasing Company...
Question 11
The following facts pertain to a non-cancelable lease agreement
between Carla Vista Leasing Company and Tamarisk Company, a
lessee.
Commencement date
May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020
$15,138.16
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
$50,000
Fair value of asset at May 1, 2020
$68,000
Lessor’s implicit rate
8
%...
Question 11 The following facts pertain to a non-cancelable lease agreement between Carla Vista Leasing Company...
Question 11
The following facts pertain to a non-cancelable lease agreement
between Carla Vista Leasing Company and Tamarisk Company, a
lessee.
Commencement date
May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020
$15,138.16
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
$50,000
Fair value of asset at May 1, 2020
$68,000
Lessor’s implicit rate
8
%...
Question 11 The following facts pertain to a non-cancelable lease agreement between Carla Vista Leasing Company...
Question 11
The following facts pertain to a non-cancelable lease agreement
between Carla Vista Leasing Company and Tamarisk Company, a
lessee.
Commencement date
May 1, 2020
Annual lease payment due at the beginning of
each year, beginning with May 1, 2020
$15,138.16
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
$50,000
Fair value of asset at May 1, 2020
$68,000
Lessor’s implicit rate
8
%...
Ballan Ltd entered into a non-cancellable lease agreement with Manufacturer Ltd to lease construction equipment from...
Ballan Ltd entered into a non-cancellable lease agreement with
Manufacturer Ltd to lease construction equipment from Manufacturer
Ltd under the following terms:
Lease term 9 years
Useful life of leased asset 11 years
Expected residual value at end of lease $6,000
Lease payment at inception (beginning) $7,000
Lease payments (at end of each year) $5,000 per annum (9
payments)
Implicit interest rate for lease 11%
Fair Value of Equipment $37,031
Present Value of minimum lease payments $34,685
Ballan does not...
The following facts are for a non-cancellable lease agreement between Sheridan Corporation and Russell Corporation, a...
The following facts are for a non-cancellable lease agreement
between Sheridan Corporation and Russell Corporation, a lessee:
Inception date
July 1,
2020
Annual lease payment due at the beginning of each year, starting
July 1, 2020
$
20,190.08
Bargain purchase option price at end of lease term reasonably
certain to be exercised by Russell
$
4,000.00
Lease term
5 years
Economic life of leased equipment
10 years
Lessor’s cost
$
52,200.00
Fair value of asset at July 1, 2020
$...
The following facts are for a non-cancellable lease agreement between Alpha Corporation and Beta Corporation, a...
The following facts are for a
non-cancellable lease agreement between Alpha Corporation and Beta
Corporation, a lessee:
Inception Date
July 1, 2018
Annual lease payment due at the beginning of each year, starting
July 1, 2018
$20,066.26
Purchase option price at end of lease term reasonably certain to
be exercised by Beta
$4,500.00
Lease term
5 years
Economic life of leased equipment
10 years
Lessor’s cost
$60,000.00
Fair value of asset at July 1, 2018
$88,000.00
Lessor’s implicit rate
9%...
The following facts pertain to a noncancelable lease agreement between Culver Leasing Company and Larkspur Company,...
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
$23,007.91
Bargain-purchase option price at end of lease term
$4,400
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$68,000
Fair value of asset at May 1, 2017
$97,000
Lessor’s implicit rate
11
%
Lessee’s incremental borrowing rate...
The following facts pertain to a noncancelable lease agreement between Riverbed Leasing Company and Marin Company,...
The following facts pertain to a noncancelable lease agreement
between Riverbed Leasing Company and Marin Company, a lessee.
Inception date: May 1, 2017 Annual lease payment due at the
beginning of each year, beginning with May 1, 2017 $20,198.56
Bargain-purchase option price at end of lease term $3,600 Lease
term 5 years Economic life of leased equipment 10 years Lessor’s
cost $72,000 Fair value of asset at May 1, 2017 $85,000 Lessor’s
implicit rate 11 % Lessee’s incremental borrowing rate...
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