. Please answer E21-11, and show all your workings clearly.
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E21-11. Please answer E21-11, and show all your workings clearly.
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- The following facts pertain to a non-cancelable lease agreement between Alschuler Leasing Company and Pharoah Electronics, a lessee, for a computer system. Commencement date October 1, 2020 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at October 1, 2020 $262,056 Book value of asset at October 1, 2020 $280,000 Residual value at end of lease term –0– Lessor’s implicit rate 10 % Lessee’s incremental borrowing rate 10 % Annual lease payment due at the beginning of each year, beginning with October 1, 2020 $54,700 The collectibility of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment.The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a…P21-15 (Please use the latest IFRS accounting standards to answer the question, and take note that lessee do recognise depreciation) Cleveland Group leased a new crane to Abriendo Construction under a 5-year, non-cancelable contract starting January 1, 2022. Terms of the lease require payments of R$48,555 each January 1, starting January 1, 2022. The crane has an estimated life of 7 years, a fair value of R$240,000, and a cost to Cleveland of R$240,000. The estimated fair value of the crane is expected to be R$45,000 (unguaranteed) at the end of the lease term. No bargain purchase or renewal options are included in the contract, and the crane is not a specialized asset. Both Cleveland and Abriendo adjust and close books annually at December 31. Collectibility of the lease payments is probable. Abriendo's incremental borrowing rate is 8%, and Cleveland's implicit interest rate of 8% is known to Abriendo. Instructions a. Identify the type of lease involved and give reasons for your…The following facts pertain to a non-cancelable lease agreement between X leasing co and S company a lessee commencement date may 1, 2020 annual lease payment due at the beginning of each year beginning may 1 2020. was $19,656,69 Bargian purchase option price at end of lease term $7000 lease term 5 year life of equipment 10 years lessors cost $65,000 fair value $93,000 lessors implict rate 6% lessees incremental borrowing rate 6% Prepare the journal entry on the lesseesbooks for 2020 and 2021; i have journal entries done but some things wrong Dr.right of asset 93000 cr Lease liability 93,000 to record lease lease liablitiy 19656.69 cr.cash 19656.69 to record te first lease payment Dr. interest expen AMOUNT i have wrong???cr. ______I have wrong 2021 Journal entries????
- The following facts pertain to a non-cancelable lease agreement between Alschuler Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date October 1, 2020 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at October 1, 2020 $313,043 Book value of asset at October 1, 2020 $280,000 Residual value at end of lease term –0– Lessor's implicit rate 8% Lessee's incremental borrowing rate 8% Annual lease payment due at the beginning of each year, beginning with October 1, 2020 $62,700 The collectibility of the lease payments is probable by the lessor. The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a finance lease…On January 1, 2022, Yencay, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Thol Warehouse Company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. The following information pertains to this lease agreement. The fair value of the building on January 1, 2022 is P4,000,000; however, the book value to Holt is P3,300,000. The building has an estimated economic life of 10 years, with no residual value. Yencay depreciates similar buildings on the straight-line method. At the termination of the lease, the title to the building will be transferred to the lessee. Yencay's incremental borrowing rate is 11% per year. Thol Warehouse Co. set the annual rental to insure a 10% rate of return. The implicit rate of the lessor is known by Yencay, Inc. The yearly rental payment includes P10,000 of executory costs related to taxes on the property. The agreement…On January 1, 2022, Yencay, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Thol Warehouse Company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor. The following information pertains to this lease agreement. The fair value of the building on January 1, 2022 is P4,000,000; however, the book value to Holt is P3,300,000. The building has an estimated economic life of 10 years, with no residual value. Yencay depreciates similar buildings on the straight-line method. At the termination of the lease, the title to the building will be transferred to the lessee. Yencay's incremental borrowing rate is 11% per year. Thol Warehouse Co. set the annual rental to insure a 10% rate of return. The implicit rate of the lessor is known by Yencay, Inc. The yearly rental payment includes P10,000 of executory costs related to taxes on the property. The agreement…
- Please solve this question with your best knowledge and experience . Please don,t reject it. Thanks in advance Burt Ltd enters into a non-cancellable 5 -years lease agreement with Earnie Ltd on 1 July 2023. The lease is for an item of machinery that, at the inception of the lease, has a fair value of $ 1,498,678 . The machinery is expected to have an economic life of 9 years, after which time it will have an expected residual value of $ 260,000 . There is a bargain purchase option that Burt Ltd will be able to exercise at the end of the 5 th year for $ 250,000 . There are to be 5 annual payments of $ 450,000 , the first being made on 30 June 2024. Included within the $ 450,000 lease payments is an amount of $ 40,000 representing payment to the lessor for the insurance and maintenance of the equipment. The equipment is to be depreciated on a straight-line basis. Required: a) Determine the rate of interest implicit in the lease and calculate the present value of the lease payments.…9. At what amount should the lease receivable be initially recognized? ₱ 1,617,000 ₱ 278,900 ₱ 375,000 ₱ 323,400Do part D, The previous answer was wrong when I posted earlier Moose Jaw Manufacturing Ltd. leases a machine to Regina Corporation. The term of the lease begins on July 1, 2020. Semi-annual lease payments are made at the end of each lease period, on June 30 and December 31. The lease contains no renewal options, and the equipment reverts to Moose Jaw at the end of the lease. Assume that both Moose Jaw and Regina follow ASPE. Details of the lease are as follows: $ 344,277 Fair value of machine at lease inception $ 271,979 Moose Jaw's cost of manufacturing the machine $ 11,798 Amount of guaranteed residual value 6% Regina's incremental borrowing rate 9% Interest rate implicit in lease 5 Lease term (in years) 7 Estimated economic life of machine (in years) Moose Jaw has determined that the collectibility of lease payments is reasonably predictable and that no additional costs will be incurred. Moose Jaw has a…
- ***WITH EXPLANATION On January 1, GEN enters into a contract with LORD for the sale of a high-end security scanner for P630,000. The contract includes a put option the obliges GEN to repurchase the scanner machine from LORD for P567,000 on or before December 31. The market value is expected to be P495,000 on December 31. LORD pays GEN P630,000 on January 1. The transaction should be accounted for as a: A. Sale B. Lease C. No sale/lease D. Cannot be determinedThe following facts pertain to a non-cancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $20,471.94 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 $65,000 Fair value of asset at May 1, 2020 $91,000 Lessor’s implicit rate 8 % Lessee’s incremental borrowing rate 8 % Prepare a lease amortization schedule for Rode for the 5-year lease termEubank Company, a lessee, enters into a lease agreement on January 1, 2021, for equipment. The following data are relevant to the lease agreement: - The term of the noncancelable lease is 4 years. Payments of $978,446 are due on January 1 of each year. The first payment is January 2021. - The fair value of the equipment on January 1, 2021 is $3,500,000. The equipment has an economic life of 6 years with nosalvage value. - Eubank uses the straight-line method of depreciation. - Eubank’s implicit rate is 8%. - This will be treated as a finance lease (Lessee Perspective). Instructions: Prepare the journal entries on Eubank’s books (lessee) that relate to the lease agreement for the following dates, you do not need to create an amortization schedule. a. January 1, 2021. b. December 31, 2021.