nuary 1, 2021 with a rate of 10%
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Nexen Corporation leased equipment for its 8-year useful life, agreeing to pay $90,000 at the beginning of the lease term on January 1, 2021, also paying $90,000 annually each January 1 for the next 7 years. Present of the 8 lease payments on January 1, 2021 with a rate of 10% are $530,000. How much should Nexen report as total
A) 110,250
B)105,650
C) 104,250
D)114,650
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- Determining Type of Lease and Subsequent Accounting On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of 100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is 2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswells incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of 7,000 annually, related to taxes on the property, are paid by Caswell directly to the taxing authority on Dec. 31 of each year. Required: 1. Determine what type of lease this is for the lessee. 2. Prepare appropriate journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019 and 2020.Saludares Company leased a machinery on January 1, 2021 with the following information: Annual rental payable at the end of each year is P1,000,000. A P300,000 payment is made to the lessor to obtain a long-term lease. At the end of the lease term, dismantling and restoring the machinery is required by contract. The present value of this obligation is P330,000. Annual executory costs paid by the lessee amount to P50,000. Lease term is 4 years and the useful life of the machinery is 8 years. The implicit rate is 10%. The PV of an ordinary annuity of 1 at 10% for 4 periods is 3.17 and the PV of 1 at 10% for 4 periods is 0.68. 1. What is the depreciation for 2021?2. What is the lease liability on December 31, 2021?On January 1, 2020, an entity leased a machinery with the following data: Annual rental payable at the end of each year for P80,000 with a lease term for 6 years and with an implicit rate of 7%. On January 1, 2023, the entity and the lessor agreed to amend the original terms of the lease by reducing the lease payment to P70,000 and increasing the implicit rate to 9%. Compute for the interest expense to be recognize on January 1, 2023. 15,947 18,968 14,696
- On January 1, 2024, Blue Co. recorded a right-of-use asset of $869,628 in a 10-year operating lease. The lease calls for ten annual payments of $120,000 at the beginning of each year. The interest rate charged by the lessor was 8%. What amount will Blue Co. record for amortization expense on December 31, 2024? O $60,030 O $64,832 O $86,963 $59,970 ringMiracle Company leased machinery for 10 years, its useful life, with effect from January 1, 2021. At that date, the fair value of the machinery was P4,900,000. Annual rentals of P700,000 are payable in advance on January 1 and the interest rate implicit in the lease is 9%. 1. What is the total lease liability which Miracle should recognize in its statement of financial position on December 31, 2021? 2. The rental payment on January 1, 2023 would reduce the finance lease liability byVon Company leased a piece of equipment to Sam Company on April 1, 2021. The lease is appropriately recorded as a sale by Von. The lease is for an 8-year period ending March 31, 2029. The first of 8 equal annual payments of P175,000 (excluding executory costs) was made on April 1, 2021. The cost of the equipment to Von is P940,000. The equipment has an estimated useful life of 10 years with a guaranteed residual value of P100,000. At the end of the lease term, the leased equipment reverts to Von Company. The interest rate implicit in the lease is 10%. 1. How much is the total financial revenue (interest revenue) over the lease term? (Use four decimal places)
- Hurley Corporation leased equipment for its 8-year useful life, agreeing to pay $90,000 at the beginning of the lease term on January 1, 20X0, also paying $90,000 annually on January 1 for the next 7. The present value of the 8 lease payments on January 1, 20X0 at a rate of 10% was $530,000. What amount must Hurley report as total expense (depreciation and interest) in the Statement of Income and Expenses of 20X0? Or $110,250 $104,250 $105,650 OR $114,650 Please don't provide solution with image format thanksHurley Corporation leased equipment for its 8-year useful life, agreeing to pay $90,000 at the beginning of the lease term on January 1, 20X0, also paying $90,000 annually on January 1 for the next 7. The present value of the 8 lease payments on January 1, 20X0 at a rate of 10% was $530,000. What amount must Hurley report as total expense (depreciation and interest) in the Statement of Income and Expenses of 20X0? Or $110,250 $104,250 $105,650 OR $114,650Darwin Company leased machinery for 10 years, its useful life, with effect from January 1, 2020. At that date, the fair value of the machinery was P4,900,000. Annual rentals of P700,000 are payable in advance on January 1 and the interest rate implicit in the lease is 9%. The first rental payment was made on January 1, 2020. What is the total lease liability (principal and interest) which Darwin Company should recognized in its statement of financial position on December 31, 2020?
- ABC Company leases a machinery from XYZ Company under a twelve-month operating lease. As an inducement to enter the lease, XYZ Company grants ABC free rent for the first two months. The lease is effective September 1, 2020 and provides for monthly rental of P12,000 to begin on November 1, 2020. 1.Compute for the rent expense for 2021 2.Determine the total net income to be recognized by the Lessor for the year 2020 as a result of this lease.LMO Company incurred expenditures for leasehold improvements during the year. The relevant lease is on an office building that the Company rented at the beginning of 2021. The improvements cost $90098. The lease's initial term is 6 years, with an option to renew for another 2 years. The company had a profit before CCA on these leasehold improvements of $707467. What would be the maximum amount of CCA the company could deduct in 2021?On January 1, 2021, PokemonGo Company leased equipment to Waldo Corporation under a lease agreement that qualifies as an operating lease to Waldo. The present value of the end-of-year lease payments of $151,526 discounted at 8% is $605,000. The expected economic life of the asset is seven years. The lease term is five years. What would Waldo record as amortization in 2021?