menu
bartleby
search
close search
Hit Return to see all results
Subscribe
Sign in

Business
AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

close solutoin list
Chapter 20, Problem 12E
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 8MC
Problem 9MC
Problem 10MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 12P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

Lessor Accounting Issues Rexon Company leases non-specialized equipment to Ten-Care Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows:

1. The lease term is 8 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year.

2. The cost of the equipment is $500,000. The equipment has an estimated life of 8 years and has a zero estimated value at the end of that time.

3. The equipment has a fair value of $500,000.

4. Ten-Ore agrees to pay all executory costs directly to a third party.

5. The lease contains no renewal or bargain purchase option.

6. The interest rate implicit in the lease is 14%.

7. The initial direct costs are insignificant and assumed to be zero.

8. It is probable that Rexon will collect the lease payments plus any amount necessary to satisfy a residual value guarantee.

Required:

  1. 1. Next Level Assuming that the lease is a sales-type lease from Rexon’s point of view, calculate the amount of the equal rental receipts.
  2. 2. Prepare a table summarizing the lease receipts and interest income earned by Rexon.
  3. 3. Prepare journal entries for Rexon for the years 2019 and 2020.

1.

To determine

Compute the amount of the equal rental receipts.

Explanation

Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.

Sale type Lease: In a Sales-Type lease, the lessor sells the asset to the lessee and records a receivable. In this type of lease, the lessor records a dealer’s or manufacturer’s profit or loss depending upon the difference between the fair value of the asset and the carrying value of the asset.

Compute the amount of the equal rental receipts:

Rental Receipt = Fair value of the asset

2.

To determine

Prepare a table that summarizing the lease receipts and interest income earned by Company R

3.

To determine

Prepare the journal entries for Company R for the years 2019 and 2020.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution
arrow_back
Chapter 20,
Problem 11E
Chapter 20,
Problem 13E
arrow_forward

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 20 Solutions

Show all chapter solutions add
Ch-20 P-1GICh-20 P-2GICh-20 P-3GICh-20 P-4GICh-20 P-5GICh-20 P-6GICh-20 P-7GICh-20 P-8GICh-20 P-9GICh-20 P-10GI
Ch-20 P-11GICh-20 P-12GICh-20 P-13GICh-20 P-14GICh-20 P-15GICh-20 P-16GICh-20 P-17GICh-20 P-1MCCh-20 P-2MCCh-20 P-3MCCh-20 P-4MCCh-20 P-5MCCh-20 P-6MCCh-20 P-7MCCh-20 P-8MCCh-20 P-9MCCh-20 P-10MCCh-20 P-1RECh-20 P-2RECh-20 P-3RECh-20 P-4RECh-20 P-5RECh-20 P-6RECh-20 P-7RECh-20 P-8RECh-20 P-9RECh-20 P-1ECh-20 P-2ECh-20 P-3ECh-20 P-4ECh-20 P-5ECh-20 P-6ECh-20 P-7ECh-20 P-8ECh-20 P-9ECh-20 P-10ECh-20 P-11ECh-20 P-12ECh-20 P-13ECh-20 P-14ECh-20 P-15ECh-20 P-1PCh-20 P-2PCh-20 P-3PCh-20 P-4PCh-20 P-5PCh-20 P-6PCh-20 P-7PCh-20 P-8PCh-20 P-9PCh-20 P-10PCh-20 P-11PCh-20 P-12PCh-20 P-1CCh-20 P-2CCh-20 P-3CCh-20 P-4CCh-20 P-5CCh-20 P-6C

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is an entity?

Accounting Information Systems

Classifying cash flows Identify whether each of the following would be reported as an operating, investing, or ...

Corporate Financial Accounting

General Motors Company (GM) disclosed estimated product warranty payable for comparative years as follows: Assu...

Financial And Managerial Accounting

PARTNER SHIP OPENING ENTRIES Sharon Usher and Leann Gomez agreed on September 1 to go into business as partners...

College Accounting, Chapters 1-27

Based on the following data, estimate the cost of the ending merchandise inventory:

Financial Accounting

Correcting entries The following errors took place in journalizing and posting transactions: a.The receipt of 8...

Accounting

If a company produces 10,000 units and sells 8,000 units during a period, which method of computing operating i...

Managerial Accounting: The Cornerstone of Business Decision-Making

Entries for bonds payable, including bond redemption The following transactions were completed by Montague Inc....

Financial & Managerial Accounting

MARKET/BOOK RATIO Edelman Engines has 17 billion in total assets. Its balance sheet shows 1.7 billion in curren...

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

What is the purpose of testing the entire system as opposed to testing part of the system?

Accounting Information Systems

An economist discussing trade policy in The New Republic wrote: One of the benefits of the United States removi...

Brief Principles of Macroeconomics (MindTap Course List)

(Short-Run Loss) Suppose a firm decides to shut down in the short run. What is the resulting loss?

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Suppose Americans decide to save more of their in-comes. If banks lend this extra saving to businesses, which u...

Principles of Economics (MindTap Course List)

Explain how and why firms implement positioning strategies and how product differentiation plays a role

MKTG 12:STUDENT ED.-TEXT

Explain how production after the Industrial Revolution differed from production under the cottage industry syst...

ECON MACRO

Many large companies monitor Twitter and Facebook posts. They have discovered social media as a tool for averti...

Essentials of Business Communication (MindTap Course List)

Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services...

Principles of Microeconomics (MindTap Course List)

(Collusion and Cartels) Use revenue and cost curves to illustrate and explain the sense in which a cartel behav...

ECON MICRO

Summarize how marketing creates value through the four types of utility.

Contemporary Marketing

How does a customers decision-marking time vary with the type of product?

Foundations of Business (MindTap Course List)

Respond to each statement here based on whether you Mostly Agree or Mostly Disagree With it. Mostly Disagree Mo...

Management, Loose-Leaf Version

Why are the benefits of reducing inflation permanent and the costs temporary? Why are the costs of increasing i...

Principles of Macroeconomics (MindTap Course List)

What ¡s the difference between a customs union and a free trade area?

Economics:

J.D. Power and Associates surveys new automobile owners to learn about the quality of recently purchased vehicl...

STATISTICS F/BUSINESS+ECONOMICS-TEXT

Why is productivity important?

Essentials of Economics (MindTap Course List)

How do non-operating assets impact a firms valuation using the corporate valuation model?

Fundamentals of Financial Management (MindTap Course List)

United Rug Company is a small rug retailer owned and operated by Pat Kirwan. After the accounts have been adjus...

Financial Accounting

What is the role of accounting in business?

Financial & Managerial Accounting

Williams Mechanic Services prepared the following work sheet for the year ended March 31,20--. Required 1. Comp...

College Accounting (Book Only): A Career Approach

What are the two variances between the actual cost and the standard cost for direct materiales?

Accounting (Text Only)

YIELD CURVES Suppose the inflation rate is expected to be 7% next year, 5% the following year, and 3% thereafte...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Evaluate the following statement: The United States has an absolute advantage in growing wheat. Therefore, it m...

Exploring Economics

The Commerce Department reported receiving the following applications for the Malcolm Baldrige National Quality...

Statistics for Business & Economics, Revised (MindTap Course List)

What does a debit balance in the cash short and over account represent? What does a credit balance in this acco...

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Which of the following does not affect the bank statement? a. Credit memo b. Debit memo c. Overdraft d. Electro...

College Accounting (Book Only): A Career Approach

Explain why net operating working capital is included in a capital budgeting analysis and how it is recovered a...

Fundamentals of Financial Management (MindTap Course List)

Explain how absolute advantage and comparative advantage differ.

Principles of Macroeconomics (MindTap Course List)

The following is a list of six control plans from this chapter or from Chapters 8 through 12. Control Plans A. ...

Pkg Acc Infor Systems MS VISIO CD

Sales mix and break-even sales Data related to the expected sales of kayaks and canoes for River Sports Inc. fo...

Survey of Accounting (Accounting I)

Under what conditions would an employee of a state receive cash for his or her compensatory time off?

PAYROLL ACCT.,2019 ED.(LL)-TEXT

For each of the following payroll-related taxes, indicate whether they generally apply to (A) employees only, (...

Corporate Financial Accounting

Suppose an economy can produce various combinations of fish and bread. If more people with strong fishing skill...

Economics For Today

What are the risks to buyers associated with each of the different types of contracts (fixed-price, incentive, ...

Purchasing and Supply Chain Management

Smith has been trying to sell his house for six months, but so far he has had no buyers. Draw the market for Sm...

Microeconomics

People often believe that large firms in an industry have cost advantages over small firms in the same industry...

Economics (MindTap Course List)

Select the correct word in parentheses. Despite the dangers, employees change their computer passwords (infrequ...

Bcom

A chemical company manufactures three chemicals: A, B, and C. These chemicals are produced via two production p...

Practical Management Science

In the following figure, which part is representative of each of the following? a. A decrease in wage rates b. ...

Macroeconomics

The controller should be a member of the top management staff. Do you agree or disagree with this statement? Ex...

Cornerstones of Cost Management (Cornerstones Series)

bartleby
© bartleby 2019