Intermediate Accounting, Student Value Edition (2nd Edition)
2nd Edition
ISBN: 9780134732145
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 18, Problem 18.15E
a.
To determine
The classification of lease for both lessee and lessor.
Given information:
Lease term is 9 years.
Lease doesn’t contain transfer of ownership.
Lease doesn’t contain a purchase option.
Economic life of asset is 9 years.
Fair value of the asset is $1,349,328.
Maintenance charges (general and administrative expenses) $5,600 payable at the end of each year.
Implicit interest rate is 8%
Annual lease payments are $200,000 due on Jan/1 each year
b.
To determine
To prepare: The amortization tables for the lease term.
Given information:
Lease term is 9 years.
Lease doesn’t contain transfer of ownership.
Lease doesn’t contain a purchase option.
Economic life of asset is 9 years.
Fair value of the asset is $1,349,328.
Maintenance charges (general and administrative expenses) $5,600 payable at the end of each year.
Implicit interest rate is 8%
Annual lease payments are $200,000 due on Jan/1 each year
c.
To determine
To prepare: The
Given information:
Lease term is 9 years.
Lease doesn’t contain transfer of ownership.
Lease doesn’t contain a purchase option.
Economic life of asset is 9 years.
Fair value of the asset is $1,349,328.
Cost of asset is $1,300,000.
Maintenance charges (general and administrative expenses) $5,600 payable at the end of each year.
Implicit interest rate is 8%
Annual lease payments are $200,000 due on Jan/1 each year
d.
To determine
To prepare: The journal entries for lessee for year one.
Given information:
Lease term is 9 years.
Lease doesn’t contain transfer of ownership.
Lease doesn’t contain a purchase option.
Economic life of asset is 9 years.
Fair value of the asset is $1,349,328.
Maintenance charges (general and administrative expenses) $5,600 payable at the end of each year.
Implicit interest rate is 8%
Annual lease payments are $200,000 due on Jan/1 each year
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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.
The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company
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Commencement date
Annual lease payment due at the
beginning of
each year, beginning with May 1,
2020
Bargain purchase option price at
end of lease term
Lease term
Economic life of leased equipment
Lessor's cost
Fair value of asset at May 1, 2020
Lessor's implicit rate
Lessee's incremental borrowing rate
May 1,
2020
$15,349.90
$6,000
50
10
$65,000
$76,000
4
years
years
96
The collectibility of the lease payments by Sheridan is probable.
Prepare a lease amortization schedule for Skysong for the 5-year lease term
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b.
Amount can't be determined
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OMR 40,000
Chapter 18 Solutions
Intermediate Accounting, Student Value Edition (2nd Edition)
Ch. 18 - Does the lessee become the owner of the equipment...Ch. 18 - Prob. 18.2QCh. 18 - Prob. 18.3QCh. 18 - What are typical terms and provisions in a lease...Ch. 18 - How does a lease offer business and financial...Ch. 18 - Prob. 18.6QCh. 18 - How is the right-of-use asset measured?Ch. 18 - What components are included in a lease contract?Ch. 18 - How does a lessee separate lease and nonlease...Ch. 18 - How does a lessor separate lease and nonlease...
Ch. 18 - Does a lessee have an option not to separate lease...Ch. 18 - What are the criteria for a lessee to report a...Ch. 18 - Prob. 18.13QCh. 18 - Can the lessor account for a lease either as an...Ch. 18 - What is the difference in the lessees lease...Ch. 18 - How does a guaranteed residual value affect the...Ch. 18 - Prob. 18.17QCh. 18 - What discount rate does the lessee use to...Ch. 18 - Does the choice of discount rate (i.e., the lessee...Ch. 18 - Prob. 18.20QCh. 18 - Prob. 18.21QCh. 18 - Prob. 18.22QCh. 18 - How does a lessee measure the lease liability?Ch. 18 - What is the lessees short-term lease policy...Ch. 18 - Prob. 18.25QCh. 18 - What are the lessee s accounting and reporting...Ch. 18 - Prob. 18.27QCh. 18 - Prob. 18.28QCh. 18 - Prob. 18.29QCh. 18 - How does the lessor measure the net investment in...Ch. 18 - Prob. 18.31QCh. 18 - Prob. 18.32QCh. 18 - Prob. 18.33QCh. 18 - Baxter Brothers, Inc. enters into a four-year...Ch. 18 - Zhou Systems signed a 5-year lease at the...Ch. 18 - Insight Corporation leases equipment for 5 years...Ch. 18 - Lowe Leasing Company recently leased machinery to...Ch. 18 - Prob. 18.5MCCh. 18 - Prob. 18.6MCCh. 18 - Prob. 18.7MCCh. 18 - Bischoff Enterprises leases office space from...Ch. 18 - Identifying Lease and Nonlease Components. Deane...Ch. 18 - Prob. 18.2BECh. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as a Finance or Operating Lease,...Ch. 18 - Prob. 18.7BECh. 18 - Prob. 18.8BECh. 18 - Prob. 18.9BECh. 18 - Classification of Lease, Lessor, IFRS. Repeat the...Ch. 18 - Prob. 18.11BECh. 18 - Finance Lease, Lessee, Lessor, Guaranteed Residual...Ch. 18 - Finance Lease, Lessee, Lessor, Unguaranteed...Ch. 18 - Composition of Lease Payments, Variable Payments....Ch. 18 - Composition of Lease Payments. Variable Payments....Ch. 18 - Determining the Implicit Rate In the Lease. Assume...Ch. 18 - Prob. 18.17BECh. 18 - Prob. 18.18BECh. 18 - Prob. 18.1ECh. 18 - Allocation of Total Payments to Lease and Nonlease...Ch. 18 - Operating Lease, Nonlease Components, Lessee....Ch. 18 - Operating Lease, Rate or Index, Effect of Variable...Ch. 18 - Prob. 18.5ECh. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Prob. 18.9ECh. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Prob. 18.12ECh. 18 - Prob. 18.13ECh. 18 - Finance Lease, Purchase Option, Lessee,...Ch. 18 - Prob. 18.15ECh. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Prob. 18.17ECh. 18 - Operating Lease, Lessor. True Image Copier Company...Ch. 18 - Operating Lease, Lessee, Amortization Schedules,...Ch. 18 - Prob. 18.20ECh. 18 - Prob. 18.21ECh. 18 - Classification as Finance or Operating Lease....Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance, Sales-Type, or...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Classification as Finance or Operating Lease,...Ch. 18 - Sales-Type Lease, Unguaranteed Residual Value,...Ch. 18 - Prob. 18.9PCh. 18 - Finance Lease, Purchase Option, Lessee,...Ch. 18 - Direct Financing Lease, Deferred Selling Profit,...Ch. 18 - Direct Financing Lease, Deferred Selling Profit,...Ch. 18 - Cases Judgment Cases Judgment Case 1: Comparison...Ch. 18 - Judgment Case 2: Lease Classification On January...Ch. 18 - Financial Statement Analysis Case You are...Ch. 18 - Surfing the Standards Case 1: Lease Contracts...Ch. 18 - Prob. 2SSCCh. 18 - Basis for Conclusions Case 1: Operating Lease...Ch. 18 - Prob. 2BCCCh. 18 - Basis for Conclusions Case 3: Lease Classification...
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