iece of machinery is on a {A}-month lease at {B}% compounded annually. Beginning-of-month payments are $397.95, and a $5,000 down payment was made. The residual value is $5,525.00. What was the purchase price of the product? {A}40 {B}6.99% {C}$334.52 {D} $7,000 {E} $5,350
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A piece of machinery is on a {A}-month lease at {B}% compounded annually. Beginning-of-month payments are $397.95, and a $5,000 down payment was made. The residual value is $5,525.00. What was the purchase price of the product?
{A}40
{B}6.99%
{C}$334.52
{D} $7,000
{E} $5,350
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- On January 1, 2020, Bacarra Company leased an asset for a term of six years. Annual rentals of P500,000 is payable every yearend. The cost of the leased asset is P2,100,000. Initial direct costs paid by Bacarra totaled P6,360. The asset will revert to Bacarra at the end of the lease term, when its residual value would amount to P100,000. Assume it is a sales-type lease with an implicit rate of 10%, how much is the net lease receivable as of yearend 2020? Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much should be credited to sales resulting from the lease? Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much is cost of sales resulting from the lease? Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much is the net income from the lease to be reported in 2020? Assume the residual value is unguaranteed and the fair…Red Co. recorded a right-of-use asset of $125,000 in a 10-year finance lease. Payments of $20,343 are made annually at the end of each year. The interest rate charged by the lessor and known by Red was 10%. The balance in the lease payable after two years will be: (Round your final answer to the nearest whole dollar.) Multiple Choice $151,250. $145,377. $100,000. $108,530.Terms of a lease agreement and related facts were: a. Leased asset had a retail cash selling price of $100,000. Its useful life was six years with no residual value (straight-line depreciation). b. Annual lease payments at the beginning of each year were $20,873, beginning January 1. c. Lessor’s implicit rate when calculating annual rental payments was 10%. d. Costs of negotiating and consummating the completed lease transaction incurred by the lessor were $2,062. e. Collectibility of the lease payments by the lessor was reasonably predictable and there were no costs to the lessor that were yet to be incurred. Required: Prepare the appropriate entries for the lessor to record the lease, the initial payment at its inception, and at the December 31 fiscal year-end under each of the following three independent assumptions: 1. The lease term is three years and the lessor paid $100,000 to acquire the asset (operating lease). 2. The lease term is six years and the lessor paid $100,000 to…
- Terms of a lease agreement and related facts were as follows: a. The lease asset had a retail cash selling price of $100,000. Its useful life was six years with no residual value (straight-line depreciation). b. Annual lease payments at the beginning of each year were $20,873, beginning January 1. c. Lessor's implicit rate when calculating annual rental payments was 10%. d. Costs of $2,062 for legal fees for the lease execution were the responsibility of the lessor. Required: Prepare the appropriate entries for the lessor to record the lease, the initial payment at its beginning, and at the December 31 fiscal year-end under each of the following three independent assumptions: 1. The lease term is three years and the lessor paid $100,000 to acquire the asset (operating lease). 2. The lease term is six years and the lessor paid $100,000 to acquire the asset. Also assume that adjusting the lease receivable (net investment) by initial direct costs reduces the effective rate of interest to…Saturday Corporation is in the business of leasing new sophisticated equipment. The lessor expects a 12% return on net investment. All leases are classified as direct lease. At the end of the lease term, the equipment will revert to the lessor. At the beginning of current year, an equipment is leased to a lessee with the following information: Cost of equipment to the lessor P5,000,000 Residual value — unguaranteed 600,000 Annual rental payable in advance at the beginning of each year 900,000 Initial direct cost incurred by the lessor 250,000 Useful life and lease term 8 years Implicit interest rate 12% What is the total unearned interest income?On January 1, 2020, Bacarra Company leased an asset for a term of six years. Annual rentals of P500,000 is payable every yearend. The cost of the leased asset is P2,100,000. Initial direct costs paid by Bacarra totaled P6,360. The asset will revert to Bacarra at the end of the lease term, when its residual value would amount to P100,000. Assume it is a sales-type lease with an implicit rate of 10% and the residual value is guaranteed, how much is the net income from the lease to be reported in 2020?
- Jenny Enterprises has Just entered a lease agreement for a new manufacturing facility. Under the terms of the agreement, the company agreed to pay rent of $17,500 per month for the next 8 years with the first payment due today. If the APR is 7.68 percent compounded monthly, what is the value of the payments today? a. $1,315,406.27 b. $1,252,274.08 c. $1,145,716.94 d. $1,260,288.63 e. $1,221,588.29Blue Co. recorded a right-of-use asset of $150,000 in a 10-year operating lease. Payments of $24,412 are made annually at the end of each year. The interest rate charged by the lessor was 10% and was known by Blue. The balance in the right-of-use asset after two years will be:On January 1, 2020, Bacarra Company leased an asset for a term of six years. Annual rentals of P500,000 is payable every yearend. The cost of the leased asset is P2,100,000. Initial direct costs paid by Bacarra totaled P6,360. The asset will revert to Bacarra at the end of the lease term, when its residual value would amount to P100,000. Assume it is a sales-type lease with an implicit rate of 10% and the residual value is unguaranteed, how much is cost of sales resulting from the lease?
- The Sirap Co leased equipment from the lessee valued at $400,000. The lease contract has payments of $50,000 per year payable at the end of each year for 12 years. The interest rate is at 8%. The lessor will repossess the equipment at the end of the lease term. The leased equipment does not have a bargain purchase option. The leased equipment has an economic useful life of 16 years. Required: use the 5 criteria, to determine if the lease qualifies as a Capital, financing lease.At the beginning of current year, Waxxy Company sold a machine and immediately leased back. The following data relate to the sale and leaseback transaction: Sale price at above fair value 6,000,000 Fair value of machine 5,000,000 Carrying amount of machine 4,500,000 Annual rental payable at the end of each year 800,000 Remaining life of machine 10 years Lease term 4 years Implicit interest rate 8% Present value of an ordinary annuity of 1 at 8% for four periods 3.312 There is no transfer of title to the lessee nor…Calloway Corporation recorded a right-of-use asset of $185,000 in a 10-year finance lease. Payments of $30,108 are made annually at the end of each year. The interest rate charged by the lessor and known by Calloway was 10%. Calculate the balance in Calloway's lease payable after two years. Please show step by steps! Multiple Choice $160,623. $148,000. $215,142. $223,850.
