Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158809
Author: Wild, John
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Use the information pertaining to Laura Leasing Company and Plote Company from E21.15. Assume that the expected residual value at the end of the lease is $10,000, such that the payments are $24,638.87.
Instructions
Prepare all of the journal entries for the lessee for 2020 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31.
In E21.15
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Plote Company. The following information relates to this agreement.
1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years.
2. The fair value of the asset at January 1, 2020, is $80,000.
3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is guaranteed.
4. The agreement requires equal annual…
a) Determine the rate of interest implicit in the lease and calculate the present value ofthe lease payments.
b) Prepare the journal entries in the books of Tea TreeLtd for the years ending 30 June2021 and 30 June 2022.
c) Prepare the portion of the statement of financial position for the year ending 30 June2022 relating to the lease asset and lease liability.
On December 31, 2019, Skysong Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for
Skysong to make annual payments of $8,162 at the beginning of each year of the lease, starting December 31, 2019. The machine
has an estimated useful life of 6 years and a $5,100 unguaranteed residual value. The machine reverts back to the lessor at the end
of the lease term. Skysong uses the straight-line method of depreciation for all of its plant assets. Skysong's incremental borrowing
rate is 9%, and the lessor's implicit rate is unknown.
Click here to view factor tables.
What type of lease is this?
This is a/an
lease.
eTextbook and Media
List of Accounts
Compute the present value of the lease payments. (For calculation purposes, use 5 decimal places as displayed in the
factor table provided and round final answer to 0 decimal places e.g. 5,275.)
Present value of the lease payments
eTextbook and Media
List of Accounts
Chapter 10 Solutions
Financial Accounting: Information for Decisions
Ch. 10 - What is the main difference between notes payable...Ch. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Jin Li, an employee of ETrain.com, leases a car at...Ch. 10 - Prob. 18QSCh. 10 - Prob. 19QSCh. 10 - Prob. 21QSCh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Bringham Company issues bonds with a par value...Ch. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Heineken N.V. reports the following information...Ch. 10 - Prob. 21ECh. 10 - Prob. 2PSACh. 10 - Refer to the bond details in Problem 10-2A,...Ch. 10 - Prob. 7PSACh. 10 - Prob. 8PSACh. 10 - Prob. 9PSACh. 10 - Prob. 10PSACh. 10 - Prob. 11PSACh. 10 - Prob. 12PSACh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 6PSBCh. 10 - Prob. 7PSBCh. 10 - Prob. 8PSBCh. 10 - Prob. 9PSBCh. 10 - Prob. 10PSBCh. 10 - Prob. 11PSBCh. 10 - Refer to the lease details in Problem 10-11B....Ch. 10 - Prob. 10SPCh. 10 - Prob. 1FSACh. 10 - Prob. 2FSACh. 10 - FSA 10-3 Selected results from Samsung, Apple, and...Ch. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 5BTN
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