Windsor Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Wildhorse Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Wildhorse has the option to purchase the equipment for $20,000 upon termination of the lease. It is not reasonably certain that Wildhorse will exercise this option. 2. The equipment has a cost of $163,000 and fair value of $187,800 to Windsor Leasing. The useful economic life is 2 years, with a residual value of $20,000. 3. Windsor Leasing desires to earn a return of 6% on its investment. 4. Collectibility of the payments by Windsor Leasing is probable.
Windsor Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Wildhorse Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Wildhorse has the option to purchase the equipment for $20,000 upon termination of the lease. It is not reasonably certain that Wildhorse will exercise this option. 2. The equipment has a cost of $163,000 and fair value of $187,800 to Windsor Leasing. The useful economic life is 2 years, with a residual value of $20,000. 3. Windsor Leasing desires to earn a return of 6% on its investment. 4. Collectibility of the payments by Windsor Leasing is probable.
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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Windsor Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Wildhorse Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:
1. | Wildhorse has the option to purchase the equipment for $20,000 upon termination of the lease. It is not reasonably certain that Wildhorse will exercise this option. | |
2. | The equipment has a cost of $163,000 and fair value of $187,800 to Windsor Leasing. The useful economic life is 2 years, with a residual value of $20,000. | |
3. | Windsor Leasing desires to earn a return of 6% on its investment. | |
4. | Collectibility of the payments by Windsor Leasing is probable. |
https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf
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