The following relate to an operating lease agreement: a. The lease term is 3 years, beginning...

The following relate to an operating lease agreement:

a. The lease term is 3 years, beginning January 1, 2018.

b. The leased asset cost the lessor $780,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets.

c. Annual lease payments at the beginning of each year were $130,500.

d. Incremental costs of negotiating costs of negotiating and consummating the completed lease transaction incurred by the lessor were $5,250.

Required:
Prepare the appropriate entries for the lessor from the beginning of the lease through the end of the lease term. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Solutions

Expert Solution

ekkarill92 answered 10 months ago

Next > < Previous

Related Solutions

The following relate to an operating lease agreement: The lease term is 3 years, beginning January...

The following relate to an operating lease agreement: The lease term is 3 years, beginning January 1, 2018. The leased asset cost the lessor $850,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets. Annual lease payments at the beginning of each year were $144,500. Incremental costs of negotiating costs of negotiating and consummating the completed lease transaction incurred by the lessor were $3,150. Required: Prepare the appropriate...

Consider the following terms of a lease. 1. The lease term is 5 years. The lease...

Consider the following terms of a lease. 1. The lease term is 5 years. The lease is noncancelable and requires equal payments of $50,000 at the beginning of each year, beginning January 1, 2019. 2. The leased asset is a standard piece of equipment. 3. The cost, and fair value, of the equipment to Lessor at the inception of the lease is $350,000. The equipment has an estimated economic life of 10 years and has a zero estimated residual value...

Blue Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Blue Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $51,025are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Blue’s incremental borrowing rate is 8%. Blue is unaware of the rate being used by the lessor. At the end of the lease, Blue has the option to buy the equipment...

Tamarisk Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Tamarisk Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $61,020 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Tamarisk’s incremental borrowing rate is 9%. Tamarisk is unaware of the rate being used by the lessor. At the end of the lease, Tamarisk has the option to buy the...

Carla Vista Steel Corporation, as lessee, signed a lease agreement for equipment for five years, beginning...

Carla Vista Steel Corporation, as lessee, signed a lease agreement for equipment for five years, beginning January 31, 2020. Annual rental payments of $45,000 are to be made at the beginning of each lease year (January 31). The insurance and repairs and maintenance costs are the lessee’s obligation. The interest rate used by the lessor in setting the payment schedule is 9%; Carla Vista’s incremental borrowing rate is 10%. Carla Vista is unaware of the rate being used by the...

Marin Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Marin Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $46,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Marin’s incremental borrowing rate is 9%. Marin is unaware of the rate being used by the lessor. At the end of the lease, Marin has the option to buy the...

Pronghorn Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Pronghorn Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $43,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Pronghorn’s incremental borrowing rate is 9%. Pronghorn is unaware of the rate being used by the lessor. At the end of the lease, Pronghorn has the option to buy the...

Riverbed Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Riverbed Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $53,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Riverbed’s incremental borrowing rate is 9%. Riverbed is unaware of the rate being used by the lessor. At the end of the lease, Riverbed has the option to buy the...

Pearl Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Pearl Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $61,020 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%; Pearl’s incremental borrowing rate is 9%. Pearl is unaware of the rate being used by the lessor. At the end of the lease, Pearl has the option to buy the...

Indigo Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December...

Indigo Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $56,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Indigo’s incremental borrowing rate is 8%. Indigo is unaware of the rate being used by the lessor. At the end of the lease, Indigo has the option to buy the...

Subjects