b. Net investment in the lease on January 1, 20x1d. - Sales, Cost of sales, and Gross profit recognized oSales type lease2. On January 1, 20x1, Soap Financing Co. leased a machine toSanitizer, Inc. Information on the lease is shown below.Cost of machineP600,00Useful life of machine5 years4 yearsLease termAnnual rent payable ạt the end of each yearP200,00Market rate of interest10%Residual value at the end of the lease termP40,000term. The lease is classified as sales type lease.value is (1) Guaranteed and (2) Unguaranteed:a. Gross investment in the lease onJanuary 1, 20x1b. Net investment in the lease on January 1, 20×1Soap Co. over the lease termon the leaseE. Journal entries in Soap's books at the commencemen

"As per the policy of our company, we are allowed to answer only the first three sub-parts in case…

b. Net investment in the lease on January 1, 20x1 d. - Sales, Cost of sales, and Gross profit recognized o Gross investment in the lease on January 1, 20x1 Sales type lease 2. On January 1, 20x1, Soap Financing Co. leased a machine to Sanitizer, Inc. Information on the lease is shown below. Cost of machine P600,00 Useful life of machine 5 yeas 4 years P200,00 Lease term Annual rent payable ạt the end of each year Market rate of interest 10% Residual value at the end of the lease term PA0,00 term. The lease is classified as sales type lease. value is (1) Guaranteed and (2) Unguaranteed: a. Gross investment in the lease on January 1, 20x1 b. Net investment in the lease on January 1, 20x1 С. Soap Co. over the lease term on the lease

b. Net investment in the lease on January 1, 20x1 d. - Sales, Cost of sales, and Gross profit recognized o Gross investment in the lease on January 1, 20x1 Sales type lease 2. On January 1, 20x1, Soap Financing Co. leased a machine to Sanitizer, Inc. Information on the lease is shown below. Cost of machine P600,00 Useful life of machine 5 yeas 4 years P200,00 Lease term Annual rent payable ạt the end of each year Market rate of interest 10% Residual value at the end of the lease term PA0,00 term. The lease is classified as sales type lease. value is (1) Guaranteed and (2) Unguaranteed: a. Gross investment in the lease on January 1, 20x1 b. Net investment in the lease on January 1, 20x1 С. Soap Co. over the lease term on the lease

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

None
show me the solution for no. 5.. thanksss
jt.3
Question Content Area A six-year operating lease requires annual rent payments of $15,000 for years 1, 2, and 3, and annual rent payments of $10,000 for years 4, 5, and 6. The agreement also requires the lessor to pay a $2,800 annual insurance premium for the leased property. Which of the following amounts should be recognized as the rental revenue in year 1 by the lessor? $10,000 $16,800 $15,000 $13,500
8
Recording Operating Lease-Lessor Gomez Inc. leases a vehicle from CareMax Inc. on January 1 for a three-year period. Gomez agrees to make $9,600 annual payments beginning on January 1. Prepare the journal entries during the year for CareMax Inc. assuming that the fair value of the vehicle is $44,800 and it has a useful life of 6 years with no salvage value (depreciated using the straight-line method). CarMax Inc. appropriately classifies the lease as an operating lease. Note: Round your answers to the nearest whole dollar. Account Name Date Jan, 1 Dec. 31 Dec. 31 Check To record receipt of lease payment To record lease revenue + # To record depreciation → = → # Dr. 0 0 0 0 0 0 Cr. 0 0 0 0 0 0
Exhibit Leased assets have an expected life of 5 years Depreciation is straight line Annual lease payment is $1,400 Interest rate is 12% 3) Find the total expense in Year 1 if exhibit refers to an Operating Lease 4) Find the total expensee in Year 1 if exhibit refers to a Capital Lease
10. On July 1, 20x6, Entity A leased a delivery truck from Entity B under a 3-year operating lease. Total rent for the term of the lease will be P36,000, payable as follows: 12 months at P 500 = P 6,000 12 months at P 750 = 9,000 12 months at P1,750 = 21,000 All payments were made when due. In Entity B's June 30, 20x8, balance sheet, the accrued rent receivable should be reported as c. 12,000 d. 21,000 b. 9,000 (AICPA)
Determining Amounts in Operating Lease-Lessee Kulver's Inc. leases equipment from Equip Inc. on January 1 under a 3-year operating lease. Kulver's agrees to pay Equip Inc. $15,000 annually with the first payment due on January 1. As an incentive for Kulver's to sign the lease by January 1, Equip Inc. paid Kulver's Inc. $700. Kulver's also incurred legal fees for the review of the lease agreement ($200) and salaries for employees involved in negotiating the lease ($1,300). Assuming an incremental borrowing rate of 7% for Kulver's Inc., determine the value of the lease liability and the right-of- use asset on January 1 for Kulver's. Note: Round your answers to the nearest whole dollar. Lease liability $ 11,620 X Right-of-use asset $ 41,620✔ Check
hik..3
Problem 3: ABC Co. leased a new machine from XXX Inc. on January 1, 20X1, under a lease with the following information: Lease term 10 years Annual rent payable at the end of each year P 80,000 Useful life of the machine 12 years Implicit interest rate 14% Lessee’s incremental borrowing rate 12% The annual rental payment includes P 6,000 to cover maintenance costs. The maintenance costs transfer services to ABC. The amount charged reflects the stand alone selling price of the maintenance services. Requirements: Provide the entries in 20X1 and 20X2. Determine the current and non-current portions of the lease liability on December 31, 20X1.