INTERMEDIATE ACCOUNTING (LL) W/CONNECT
9th Edition
ISBN: 9781260679694
Author: SPICELAND
Publisher: MCG
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Chapter 6, Problem 6.13BE
Lease payment
• LO6–9
On September 30, 2018, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make 10 annual lease payments of $55,000 with the first payment due immediately. Accounting standards require the company to record a lease liability when recording this type of lease. Assuming an 8% interest rate, at what amount should Ferguson record the lease liability on September 30, 2018, before the first payment is made?
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Problem 4
On January 1, 2021, Twice Company entered into a lease agreement with the following:
Floor space
Annual rental payable at the end of each year
Implicit rate in the lease
1,500 square meters
200,000
12%
12 years
6.1944
Lease term
Present value of an ordinary annuity at 12% for 12 periods
On January 1, 2024, the lessee and the lessor agreed to amend the original terms of the lease with the
following information:
Additional floor space
Increase in rental payable at the end of each year
Implicit rate in lease
Present value of an ordinary annuity of 1 at 10% for 9 periods
2,000 square meters
300,000
10%
5.759
1. What amount should be reported as lease liability on January 1, 20217
2. What amount should be reported as additional lease liability on January 1, 2024?
3. What amount should be reported as total interest expense for 20247
Brief Exercise 5-13 (Algo) Lease payment [LO5-10]
On September 30, 2021, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make 8 annual lease
payments of $58,000 with the first payment due immediately. Accounting standards require the company to record a lease liability
when recording this type of lease.
Assume a 9% interest rate. What amount should Ferguson record the lease liability on September 30, 2021, before the first payment is
made? (Round your final answers to nearest whole dollar amount.)
Table or calculator function:
Lease Payment:
PV of Lease:
Aw
IM
Problem C- Garol Gym
On January 1, 2016. Garol Gym leased equipment under a finance lease. The lease agreement specified
payments of P37.000 per year (payable each year on December 31. starting at the end of 2016) for 8
years. The market rate of interest for lease transactions of this type is 8 percent compounded annually
Required
a. Calculate the present value of the lease.
b. Journalize the lease arrangement on Garol's blook on January 1, 2016.
b. Prepare an amortization schedule of all the lease payments.
obok
Chapter 6 Solutions
INTERMEDIATE ACCOUNTING (LL) W/CONNECT
Ch. 6 - Prob. 6.1QCh. 6 - Explain compound interest.Ch. 6 - Prob. 6.3QCh. 6 - Prob. 6.4QCh. 6 - Prob. 6.5QCh. 6 - Prob. 6.6QCh. 6 - What is an annuity?Ch. 6 - Explain the difference between an ordinary annuity...Ch. 6 - Prob. 6.9QCh. 6 - Prepare a time diagram for the present value of a...
Ch. 6 - Prepare a time diagram for the present value of a...Ch. 6 - What is a deferred annuity?Ch. 6 - Assume that you borrowed 500 from a friend and...Ch. 6 - Compute the required annual payment in Question...Ch. 6 - Explain how the time value of money concept is...Ch. 6 - Prob. 6.1BECh. 6 - Prob. 6.2BECh. 6 - Prob. 6.3BECh. 6 - Present value; single amount LO63 John has an...Ch. 6 - Present value; solving for unknown; single amount ...Ch. 6 - Future value; ordinary annuity LO66 Leslie...Ch. 6 - Future value; annuity due LO66 Refer to the...Ch. 6 - Prob. 6.8BECh. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - Solve for unknown; annuity LO68 Kingsley Toyota...Ch. 6 - Price of a bond LO69 On December 31, 2018,...Ch. 6 - Lease payment LO69 On September 30, 2018,...Ch. 6 - Prob. 6.1ECh. 6 - Future value; single amounts LO62 Determine the...Ch. 6 - Prob. 6.3ECh. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Solving for unknowns; single amounts LO64 For...Ch. 6 - Future value; annuities LO66 Wiseman Video plans...Ch. 6 - Prob. 6.8ECh. 6 - Solving for unknowns; annuities LO68 For each of...Ch. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Deferred annuities LO67 Required: Calculate the...Ch. 6 - Prob. 6.13ECh. 6 - Prob. 6.14ECh. 6 - Solving for unknown annuity amount LO68 Required:...Ch. 6 - Prob. 6.16ECh. 6 - Price of a bond LO69 On September 30, 2018, the...Ch. 6 - Price of a bond; interest expense LO69 On June...Ch. 6 - Lease payments LO69 On June 30, 2018,...Ch. 6 - Lease payments; solve for unknown interest rate ...Ch. 6 - Prob. 6.21ECh. 6 - Analysis of alternatives LO63, LO67 Esquire...Ch. 6 - Prob. 6.2PCh. 6 - Analysis of alternatives LO63, LO67 Harding...Ch. 6 - Investment analysis LO63, LO67 John Wiggins is...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Deferred annuities LO67 On January 1, 2018, the...Ch. 6 - Prob. 6.9PCh. 6 - Noninterest-bearing note; annuity and lump-sum...Ch. 6 - Solving for unknown lease payment LO68, LO69...Ch. 6 - Solving for unknown lease payment; compounding...Ch. 6 - Lease v s. buy alternatives LO63, LO67, LO69...Ch. 6 - Prob. 6.14PCh. 6 - Prob. 6.15PCh. 6 - Prob. 6.1BYPCh. 6 - Prob. 6.2BYPCh. 6 - Prob. 6.3BYPCh. 6 - Prob. 6.4BYPCh. 6 - Judgment Case 65 Replacement decision LO63, LO67...Ch. 6 - Prob. 6.6BYPCh. 6 - Prob. 6.7BYP
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