18) The Thomson Company (lessee) leased equipment from Columbus Industries on January 1, 2021. Columbus(lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term Annual payments Life of asset Lessor's implicit interest rate Lessee's incremental rate 3 years $120,000 beginning Jan. 1, 2021 3 years 8% 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Columbus would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for olumbus on January 1, 2021. Round to nearest dollar. 3. Prepare the adjusting journal entry for Columbus on December 31, 2021. Round to nearest dollar.

18) The Thomson Company (lessee) leased equipment from Columbus Industries on January 1, 2021. Columbus(lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term Annual payments Life of asset Lessor's implicit interest rate Lessee's incremental rate 3 years $120,000 beginning Jan. 1, 2021 3 years 8% 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Columbus would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for olumbus on January 1, 2021. Round to nearest dollar. 3. Prepare the adjusting journal entry for Columbus on December 31, 2021. Round to nearest dollar.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Metro Company (lessee) leased equipment from Denver Industries on January 1, 2021. Denver (lessor) manufactured the equipment at a cost of $270,000.Other information:Lease term 3 yearsAnnual payments $120,000 beginning Jan. 1, 2021Life of asset 3 yearsLessor's implicit interest rate 8%Lessee's incremental rate 9%Required:Round your answers to the nearest whole dollar amounts.1. Calculate the amount of lease receivable that Denver would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for Denver on January 1, 2021. Round to nearest dollar..3. Prepare the adusting journal entry for Denver on December 31, 2021. Round to nearest dollar.
Help Save & Ex On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $140,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,405,261 lease liability. Required: Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. Round your answer to 1 decimal place. (FV of $1, PV of $1, EVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) Interest rate implicit %
East Company leased a new machine from North Company on January 1, 2021 under a lease with the following information:Annual rental payable at the beginning of each lease year P 400,000Lease term 10 yearsUseful life of the machine 12 yearsImplicit interest rate 14%Incremental borrowing rate of the lessee 12%Initial direct costs 100,000East Company has the option to purchase the machine on January 1, 2031 by paying P500,000 which approximates the expected fair value of the machine on the option exercise date. 1. At the commencement of the lease, what amount should be recognized as finance lease liability? 2. What would be the carrying amount of the leased asset in the records of East Company as of December 31, 2023? 3. The balance of the finance lease liability as of December 31, 2024 is:
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Help Save & Exit Submit On June 30, 2021, Elle Company leased a machine from Fyre Leasing. The contract requires Elle to make semiannual lease payments of $243,073 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. Elle's incremental borrowing rate is 12%, the same rate used to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. Fyre constructed the machine at a cost of $1,340,000. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price at which Fyre is "selling" the machine (present value of the lease payments) at June 30, 2021. 2. What would be the amounts related to the lease that Fyre would report in its balance sheet at December 31, 2021? (Ignore taxes.) 3. What would be the amounts related to the lease that Fyre would report in its income statement for the year…
Manufacturers Southern leasedhigh tech electronics equipment from international machines on January 1, 2024. international machines manufactured the equipment at a cost of $89,000. Manufacturers Southern's fiscal year ends December 31. Manufacturers Southern's fiscal year ends December 31. Lease term 2 years (8 quarterly periods) Quarterly rental payments $16,000 at the beginning of each period Economic life of asset 2 years Fair value of asset $117,590 Implicit interest rate 10% Required: 1. Show how International Machines determined the $16,000 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024
6. Lessee Company leased a machine on January 1, 2019 with the following pertinent information:Implicit interest rate - 10%Incremental interest rate - 12%Useful life of the machine - 12 yearsLease term - 10 yearsFixed rental payment at the end of each year - 900,000The Lessee Company has the option to purchase the machine upon the lease expiration on January 1, 2029 by paying P400,000. The lessee is reasonably certain to exercise the purchase option at the commencement date of the lease. The estimated residual value of the machine at the end of the 12-year life is P500,000. The carrying value of the right-of-use asset at the end of 2019 is?
Q2. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1. 2020. Hi-Tech manufactured the equipment at a cost of $90,000. Other information: Lease term Annual payments Life of asset Implicit interest rate Incremental rate PV, annuity due, 3 periods, 8% PV, ordinary annuity, 3 periods, 8% 2.5771 3 years $40,000 on January 1 each year 3 years 8% 8% 2.7833 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts.