Exercise 3: On 2 January 2014 Tokyo Co. lease large equipment from China Co. for four year at annual rent $70000, in addition with rent Tokyo Co. pay annual executor $6500. Both Co. classified this agreement is an operating lease. Required: Records the journal entries in book of Tokyo Co.

Exercise 3: On 2 January 2014 Tokyo Co. lease large equipment from China Co. for four year at annual rent $70000, in addition with rent Tokyo Co. pay annual executor $6500. Both Co. classified this agreement is an operating lease. Required: Records the journal entries in book of Tokyo Co.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.9E: Leased Assets Koffman and Sons signed a four-year lease for a forklift on January 1, 2016. Annual...

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Leased Assets Koffman and Sons signed a four-year lease for a forklift on January 1, 2016. Annual lease payments of $1,510, based on an interest rate of 8%, are to be made every December 31, beginning with December 31, 2016. Required Assume that the lease is treated as an operating lease. Will the value of the forklift appear on Koffmans balance sheet? What account will indicate that lease payments have been made? Assume that the lease is treated as a capital lease. Prepare any journal entries needed when the lease is signed. Explain why the value of the leased asset is not recorded at $6,040 (1,5104). Prepare the journal entry to record the first lease payment on December 31, 2016. Calculate the amount of depreciation expense for the year 2016. At what amount would the lease obligation be presented on the balance sheet as of December 31, 2016?
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After the fourth year, the residual value was estimated at The lease provided for a transfer of title to the lessee at the and four year-end rental payments. The lease qualified as a Module4_Lease.pdf x of the asset was P7,994,000. Terms of the lease specify four-year life for the lease, an annual interest rate of 15% Ericson Company leased an asset to another entity. The coet 12 / 19 100% Problem 13-13 (IAA) direct financing lease.. The lease provided for a transfer of title to the lessee After the fourth year, the residual value was estimated P1,000,000. The PV of 1 at 15% for 4 periods is .572, and the PV of a ordinary annuity of 1 at 15% for 4 periods is 2.855. What is the annual rental payment? a. 2,000,000 b. 3,000,350 c. 2,800,000 d. 2,599,650
Part 2: At January 1, 2024, Norway Company leased a machine from Yong Manufacturer. The following information pertains to the lease: Lease term Annual lease payments beginning January 1, 2024 and at each December 31 thereafter through 2025 Present value of lease payments at 6% Yong Manufacturer's implicit rate (known by Norway) 3 years $80,000 $226,671 6% On December 31, 2026, the machine reverts back to Yong. Both companies use straight-line depreciation/amortization. Assume useful life of machine is 5 years. Fair value of equipment is $360,000. The lease is classified as an operating lease: • What is the balance of right-of-use asset that Norway will report in its balance sheet at December 31, 2024?
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