Kirkland Manufacturing Ltd. (lessee) has signed a lease agreement with VPN Leasing Inc. to lease some specialized manufacturing equipment. The terms of the lease are as follows: The lease is for 5 years starting January 1, 2020. - Kirkland must pay VPN $54,114 on January 1 of each year, beginning in 2020. - Equipment of this type normally has an economic life of 6 years. - VPN has concluded, based on its review of Kirkland’s financial statements, that there is no unusual credit risk in this situation.  VPN will not incur any further costs with regard to this lease. -  VPN purchases this equipment directly from the manufacturer at a cost of $202,025 and normally sells the equipment for $241,625. - Kirkland’s borrowing rate is 7%. - Kirkland uses the straight-line method to depreciate similar equipment. - Both Kirkland and VPN have calendar fiscal years (year end December 31), and follow ASPE. Determine the depreciation expense for Kirkland Manufacturing for 2020: Select one: a. $40,271. b. $44,375. c. $47,481. d. $48,325. e. None of the above.   What would be the journal entry on VPN Leasing’s books on January 1, 2020?     Select one: a. DR Lease receivable $270,570; CR Equipment Acquired for Lessee $241,625; CR Unearned Interest Income $28,945. b. DR Lease receivable $270,570; DR COGS $202,025; CR Interest revenue $28,945; CR Sales $241,625; CR Inventory $202,025. c. DR Lease receivable $270,570; DR COGS $202,025; CR Sales $241,625: CR Inventory $202,025; CR Unearned interest $28,945. d. DR Lease receivable $270,570; DR COGS $202,025; CR Equipment Acquired for Lessee 241,625; CR Inventory $202,025; CR Unearned Interest Income $28,945. e. None of the above

Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $78,000 under a 5-year lease on December 20, 2022. The lease commences on January 1, 2023, and Leewin will return the automobile to Bumble on December 31, 2027. The automobile has an estimated useful life of 7 years. Leewin made a lease payment of $10,700 on December 20, 2022. In addition, the lease agreement stipulates annual payments of $10,700, due on January 1 of 2023, 2024, 2025, 2026, and 2027. The implicit rate of the lease is 4% and is known by Leewin. There is no purchase option, no lease incentives, no residual value guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $2000.Assuming that this is classified as an operating lease, how much interest expense is recorded in 2023? Group of answer choices $1554 $2140 $0 $1982

Technoid Incorporated sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2024. The manufacturing cost of the computers was $17 million. This noncancelable lease had the following terms: Lease payments: $2,691,724 semiannually; first payment on January 1, 2024; remaining payments on June 30 and December 31 each year through June 30, 2028. Lease term: 5 years (10 semiannual payments). No residual value; no purchase option. Economic life of equipment: 5 years. Implicit interest rate and lessee's incremental borrowing rate: 6% semiannually. Fair value of the computers on January 1, 2024: $21 million. What is the interest revenue that Technoid would report for this lease in its income statement for the year ended December 31, 2024? Note: Round your answer to the nearest whole dollar.Multiple Choice   $0   $2,101,400   $1,098,497   None of these answer choices is correct.

Sunland Company specializes in leasing large storage units to other businesses. Sunland entered a contract to lease a storage unit to Riskey, Inc. for 4 years when that particular storage unit had a remaining useful life of 5 years. The fair value of the unit was $13,000 at the commencement of the lease on January 1, 2020. The present value of the five equal rental payments of $3,481 at the start of each year, plus the present value of a guaranteed residual value of $1,000, equals the fair value of $13,000, Sunland’s implicit rate of return on the lease of 9%. The following is a correct, complete amortization schedule created by Sunland. Date   Lease Payment   Interest (9%) onOutstanding Lease Receivable   Reduction ofLease Receivable   Balance ofLease Receivable   1/1/20                         $13,000     1/1/20   $3,481             $3,481       9,519     1/1/21   3,481     $857       2,624       6,895     1/1/22   3,481     621       2,860       4,035     1/1/23…

Give me correct answer with explanation.

Indigo Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $144,000 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $48,800 payable each December 31, beginning December 31, 2019. An interest rate of 9% is implicit in the lease agreement. Collectibility of the rentals is not probable. Prepare any journal entry for Indigo on December 31, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

The lessor company signs a lease agreement on December 31, 2020 to lease equipment to the lessee company. The term of the non-cancelable lease is 8 years, and yearly rental payment of $87,000 is required at the end of each year, beginning on December 31, 2020. The agreement specifies that the unguaranteed residual value is $42,000. The lessor expects to earn a return of 10% on its investment. The equipment has a useful economic life of 10 years. What is the amount of lease receivable the lessor will record on December 31, 2020? (You must choose from the following present/future values. Please do not use the tables in the textbook, tables posted on the Blackboard, or values from a financial calculator.)   Future Value Single Sum Present Value Single Sum Future Value Ordinary Annuity Present Value Ordinary Annuity Present Value Annuity Due 10%, 8 periods   2.14   0.47   11.44   5.33   5.87 10%, 10 periods   2.59   0.39   15.94   6.14   6.76

Whispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $54,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 6%; Whispering’s incremental borrowing rate is 8%. Whispering is unaware of the rate being used by the lessor. At the end of the lease, Whispering has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Whispering uses the straight-line method of depreciation on similar owned equipment.

On January 1, 2022, Lenore Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Lenore to make annual payments of $10,000 at the beginning of each year, starting January 1, 2022.  Lenore correctly accounts for the lease as a finance lease.  The machine has an estimated useful life of 6 years and a $5,000 guaranteed residual value.  The machine reverts back to the lessor at the end of the lease term.   Lenore uses the straight-line method of depreciation for all of its plant assets.  Lenore’s incremental borrowing rate is 8% and the Lessor’s implicit rate is known to be 6%.     Required:   Compute the present value of the minimum lease payments for Lenore (lessee) assuming that the anticipated value of the machine at the end of the lease term will be at least $5,000. Compute the present value of the minimum lease payments for Lenore (lessee) assuming that the anticipated value of the machine at the end of the lease term will be $3,000.

Skysong Dairy leases its milking equipment from Concord Finance  Company under the following lease terms. 1.   The lease term is 10 years, noncancelable, and requires equal rental payments of $32,500 due at the beginning of each year starting January 1, 2020. 2.   The equipment has a fair value at the commencement of the lease (January 1, 2020) of $244,649 and a cost of $267,000 on Concord Finance’s books. It also has an estimated economic life of 15 years and an expected residual value of $15,300, though Skysong Dairy has guaranteed a residual value of $19,700 to Concord Finance. 3.   The lease contains no renewal options, and the equipment reverts to Concord Finance upon termination of the lease. The equipment is not of a specialized use. 4.   Skysong Dairy’s incremental borrowing rate is 8% per year. The implicit rate is also 8%. 5.   Skysong Dairy depreciates similar equipment that it owns on a straight-line basis. 6.   Collectibility of the payments is probable. A)…