Crane Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $819,000 are made at the end of each year. The present value of the lease payments at 9% is $4,122,000. Crane uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).

Crane Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $819,000 are made at the end of each year. The present value of the lease payments at 9% is $4,122,000. Crane uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 5RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...

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Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the first year of the lease assuming the lease is classified as a finance lease. However, assume that Garvey is now required to make the 65,949.37 payments on January 1 each year and that the fair value at the lease inception is now 275,000 (65,949:37 4:169865).
Lessee and Lessor Accounting Issues The following information is available for a noncancelable lease of equipment entered into on March 1, 2019. The lease is classified as a sales-type lease by the lessor (Anson Company) and as a finance lease by the lessee (Bullard Company). Assume that the lease payments are nude at the beginning of each month, interest and straight-line depreciation are recognized at the end of each month, and the residual value of the leased asset is zero at the end of a 3-year life. Required: 1. Record the lease (including the initial receipt of 2,000) and the receipt of the second and third installments of 2,000 in Ansons accounts. Carry computations to the nearest dollar. 2. Record the lease (including the initial payment of 2,000), the payment of the second and third installments of 2,000, and monthly depreciation in Bullards accounts. The lessee records the lease obligation at net present value. Carry computations to the nearest dollar.
Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.
The Controller of the Berg Corporation started the following amortization table as it relates to a lease: Date Annual Lease Payments Interest at the rate of 11% Reduction of Liability Liability Lease Inception January 1, 2015 $73,753 January 1, 2015 12,000 0 21,000 $61,753 December 31, 2015 a) Complete the table. b) Prepare the journal entry to record the lease on the books. c) Record the January 31, 2015 journal entry.
TOPIC: LEASESCompute for the following (show solution):a. Manufacturer's profit recognized in the year 2020.b. Total financial revenue pertaining to the lease.c. Interest Revenue recognized in the year 2020.d. Net Finance lease Receivable balance, December 31, 2020.
The Controller of the Berg Corporation started the following amortization table as it relates to a lease.: Date Annual Lease Payments Interest at the rate of 11% Reduction of Liability Liability Lease Inception January 2 2015 $73,753 January ,1 2015 $12,000 0 121,000 $61,753 December 31,2015 Complete the table. Prepare the journal entry to record the lease on the books. Record the December 31 ,2015 journal entry.
Sandhill Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $772,000 are made at the end of each year. The present value of the lease payments at 11% is $3,638,000. Sandhill uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). (a) Prepare an amortization table for 20121 and 2022. Sandhill Co.Lease Amortization Schedule Date Annual LeaseReceipt/Payment Interest onReceivable/Liability Reduction inReceivable/Liability LeaseReceivable/Liability 1/1/21 $ 12/31/21 $ $ $ 12/31/22
1. Prepare a table of amortization of the lease liability and interest expense. 2. Prepare journal entries for 2021 and 2022. 3. Prepare journal entry on January 1, 2026 to record the return of the machinery to the lessor. Assume thefair value of the asset is P450,000.
What amount should be included in current liabilities on Dec 31, 2021 in relation to the lease? **see attached pica. 65,000b. 85,000c. 115,000d. 200,000
Required: How much is to be reported in the statement of financial position as lease liability for the year ended December 31, 2021?* What is the interest expense for the calendar year 2022? (round off answer to the nearest WHOLE NUMBER) How much depreciation expense is to be recorded for the year ended 2021? (present answer with 2 DECIMAL PLACES)
Please help answer questions 21-24 Question 21 Calculate the lease liability balance as at 31 December 2020 of Looter Limited using the amortization table approach. Question 21 options: 1) R43 797 2) R50 367 3) R6 092 4) R87 288 Question 22 Calculate the finance charges amount as at 31 December 2023 of Looter Limited using the amortization table approach. Question 22 options: 1) R35 100 2) R2 181 3) R12 500 4) R3 191 Question 23 Calculate the capital repayment amount of Looter Limited as at 31 December 2022 using the amortization table approach. Question 23 options: 1) R29 008 2) R40 020 3) R50 000 4) R17 250 Question 24 Calculate the finance charges amount that is deducted by Looter Limited as at 31 December 2023, when calculating taxable income using statement of profit & loss approach. Question 24 options: 1) (R6 092) 2) (R3 191) 3) (R8 729) 4) (R11 126)
Blossom Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $814,000 are made at the end of each year. The present value of the lease payments at 12% is $3,715,000. Blossom uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). prepare an amortization table for 2021 ND 2022