Question
In: Accounting
RBC leased high-tech electronic equipment from Scotia on January 1, 2018. The present value of the...
- RBC leased high-tech electronic equipment from Scotia on January 1, 2018. The present value of the lease payments and the fair value of the equipment are both $56,040.
Related Information:
Lease term 2 years (8 quarterly periods)
Quarterly lease payments $7,500 at Jan 1, 2018 and at Mar 31,
June 30, Sept 30 and Dec 31 thereafter
Economic life of asset 2 years (straight-line, zero residual value, quarterly)
The interest rate needs to be calculated with the information provided
Required:
- Prepare appropriate journal entries for RBC (assuming it is a finance lease) on January 1, 2018 and March 31, 2018.
- Prepare appropriate journal entries for RBC (assuming it is an operating lease and the useful life of the asset is five years) on January 1, 2018 and March 31, 2018.
- Prepare appropriate journal entries for Scotia (assuming it is a finance lease) on January 1, 2018 and March 31, 2018.
- Prepare appropriate journal entries for Scotia (assuming it is an operating lease and the useful life of the asset is five years) on January 1, 2018 and March 31, 2018.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $117,772. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related
Information:
Lease term
2 years (8 quarterly
periods)
Quarterly rental payments
$15,500 at the beginning of each
period
Economic life of asset
2 years
Fair value of asset...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $127,650. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables provided.) Related
Information: Lease term 2 years (8 quarterly periods) Quarterly
rental payments $16,800 at the beginning of each period Economic
life of asset 2 years Fair value of asset...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $125,370. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables provided.) Related
Information: Lease term 2 years (8 quarterly periods) Quarterly
rental payments $16,500 at the beginning of each period Economic
life of asset 2 years Fair value of asset...
Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the...
Grichuk Power leased high-tech electronic equipment from Kolten
Leasing on January 1, 2018. Kolten purchased the equipment from
Wong Machines at a cost of $255,500, its fair value. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related
Information:
Lease term
2 years (8 quarterly
periods)
Quarterly lease payments
$20,500 at Jan. 1, 2018, and at
Mar. 31, June 30, Sept. 30, and...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $127,024. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related
Information:
Lease term
2 years (8 quarterly
periods)
Quarterly rental payments
$17,000 at the beginning of each
period
Economic life of asset
2 years
Fair value of asset...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $117,772.
Related Information:
Lease term
2 years (8
quarterly periods)
Quarterly rental
payments
$15,500 at the
beginning of each period
Economic life of
asset
2 years
Fair value of
asset
$117,772
Implicit
interest rate
6%
(Also lessee’s incremental borrowing rate)
Prepare a lease amortization schedule for the term of the lease
for Manufacturers Southern from the...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $125,370. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related
Information:
Lease term
2 years (8 quarterly
periods)
Quarterly rental payments
$16,500 at the beginning of each
period
Economic life of asset
2 years
Fair value of asset...
Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the...
Grichuk Power leased high-tech electronic equipment from Kolten
Leasing on January 1, 2018. Kolten purchased the equipment from
Wong Machines at a cost of $250,000, its fair value. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use
appropriate factor(s) from the tables provided.) Related
Information: Lease term 2 years (8 quarterly periods) Quarterly
lease payments $15,000 at Jan. 1, 2018, and at Mar. 31, June 30,
Sept. 30, and...
Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the...
Grichuk Power leased high-tech electronic equipment from Kolten
Leasing on January 1, 2018. Kolten purchased the equipment from
Wong Machines at a cost of $253,500, its fair value. (FV of $1, PV
of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related Information:
Lease term
2 years (8 quarterly periods)
Quarterly lease payments
$18,500 at Jan. 1, 2018, and at Mar. 31, June 30, Sept. 30, and...
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2018. International Machines manufactured...
Manufacturers Southern leased high-tech electronic equipment
from International Machines on January 1, 2018. International
Machines manufactured the equipment at a cost of $96,000.
Manufacturers Southern's fiscal year ends December 31. (FV of $1,
PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related
Information:
Lease term
2 years (8 quarterly
periods)
Quarterly rental payments
$16,500 at the beginning of each
period
Economic life of asset
2...
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