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Classification of Lease, Lessor, IFRS. Repeat the requirements of BE18-9 for the lessor, Perry Leasing assuming that Perry is an IFRS reporter Perry is not a dealer.
BE18-9. Classification as Sales-Type or Operating Lease, Lessor. Using the information provided in BE18-7, prepare the
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Intermediate Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (2nd Edition)
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- Use the information in RE20-1. Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.arrow_forwardLessee 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.arrow_forwardUse 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. Assume that Garvey is required to make payments on December 31 each year.arrow_forward
- Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2024. Chance elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information: Lease term Monthly lease payments Economic life of asset Interest rate charged by the lessor View transaction list Required: Prepare appropriate entries for Chance from the beginning of the lease through April 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet < 1 2 3 4 5 1 years (12 monthly periods) on January 1, 2024, through December 1, 2024. years $56,000 5 8% Record the beginning of the lease for Chance. Aarrow_forwardApplying New Lease Accounting Standards for Operating Leases On January 1 of the current year, CCH Corporation entered into the following lease contract. Based on the facts, CCH Corporation classifies the lease as an operating lease. Details of lease contract Leased asset Office space Lease term 5 years Annual lease payment $115,487 Upfront fees $10,000 Cost of debt capital 5% a. Determine the amount of the lease liability that CCH will add to its balance sheet at the inception of the lease. Amount of lease liability b. What amount will be added to the balance sheet as an asset? Amount added as an asset The rest of the questions are given in pictures below. please answer all parts correctly. i will upvote. thank you!!arrow_forwardPrepare the journal entries that the lessee should make to record the following transactions. The lessee makes a lease payment of $80,000 to the lessor in an operating lease transaction. Veatech Company leases a new building from Joel Construction, Inc. The present value of the lease payments is $700,000.The lease qualifies as a capital lease.arrow_forward
- ABC Company leases a machinery from XYZ Company under a twelve-month operating lease. As an inducement to enter the lease, XYZ Company grants ABC free rent for the first two months. The lease is effective September 1, 2020 and provides for monthly rental of P12,000 to begin on November 1, 2020. 1.Compute for the rent expense for 2021 2.Determine the total net income to be recognized by the Lessor for the year 2020 as a result of this lease.arrow_forwardChance Enterprises leased equipment from Third Bank Leasing on January 1, 2024. Chance elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information: Lease term Monthly lease payments Economic life of asset Interest rate charged by the lessor View transaction Bet Required: Prepare appropriate entries for Chance from the beginning of the lease through April 1, 2024. Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account field. Journal entry worksheet 1 2 3 Note: Enter debits before credits. Date January 01, 2024 Record entry 4 Record the beginning of the lease for Chance. 5 1 $48,000 5 9% General Journal Clear every years (12 monthly periods) on January 1, 2024, through December 1, 2024. years Debit Credit View general Journalarrow_forwardPrepare an amortization table for the five-year term of the lease. Prepare journal entries in the books of Generous, Inc. for years 2022 and 2023 to record all transactions relating to the lease. Prepare the journal entry at the end of the lease term to record the transfer of the leased automobiles to the lessor.arrow_forward
- he following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Ivanhoe Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $99,118 Residual value of equipment at end of lease term, guaranteed by the lessee $53,000 Expected residual value of equipment at end of lease term $48,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, $554,000 Lessor’s implicit rate 6 % Lessee’s incremental borrowing rate 6 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.Click here to view factor tables. (a) Your answer is partially correct. Try again. Prepare an amortization schedule that would be suitable for the lessee for the lease term.…arrow_forwardHow would I record the necessary journal entries using this information? - It is an operating lease. - On November 1, 2019 (the beginning of the fiscal year), CAP acquired a of its equipment through a lease agreement with Lessor Corp. The lease contract has the following terms and conditions: - CAP agrees to lease equipment from Lessor Corp. with a fair market value of $900,000 - The term of the lease is for seven years, with annual rental payments of $145,000 due at the beginning of each year. CAP knows the implicit interest rate on the lease agreement is 5%. CAP knows that it could borrow at an incremental rate of 6%. - There is no residual value. - CAP will cover the executory costs associated with the lease. The executor costs will be approximately $10,000 per annum and are included as part of the $145,000 rental payment. - The lease offers a bargain purchase option to purchase the equipment for $50,000 at the end of the seventh year. At the end of year seven, the fair market…arrow_forwardWindsor Leasing Company signs an agreement on January 1, 2020, to lease equipment to Cole Company. The following information relates to this agreement. 1. 2. 3. 4. 5. Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor's annual accounting period ends on December 31, and it does not use reversing entries. (Credit account titles are automatically inden when amount is entered. Do not ind manually. Record journal entries in the order presented in the problem.) Date 20 0 /20 The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. The cost of the asset to the lessor is $230,000. The fair value of the asset at January 1, 2020, is $230,000. 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 $24,339, none of which is…arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
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