Lessor Corporation, a manufacturer of equipment, enters into a lease of specialized equipment with Lessee Corp. on January 1 of Year 1. Title to the asset remains with Lessor Corp. at the end of the lease. Lessee Corp. does not guarantee the residual value of the specialized equipment at the end of the lease term, and the lease contains no renewal or purchase options. The following information pertains to the lease. Lease term Economic life of the leased equipment Annual lease payments Payment date (first payment due at lease commencement) Fair value of the leased equipment Lessor Corp's carrying value of the leased equipment Rate implicit in the lease (known by lessee) Estimated fair value of the equipment at the end of the lease term Required a. Determine the classification of the lease for Lessee Corporation. t Lease Liability Schedule 5 years 6 years $2,614 Annually on Jan. 1 $11,440 $9,900 10.03% $880 Journal Entries b. Prepare a schedule of the lease liability for the first two years of the lease term. . Note: Round each amount in the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule.

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Morgan Corp enters into a lease of nonspecialized equipment with Hoffman Corp. The following is information about the lease: Lease term five years, no renewal option Economic life of equipment is 6 years no purchase option annual lease payments $11,000 Morgan Corp's incremetal borrowing rate is 7% Title to the asset remains with Hoffman Corm upon lease expiration The fair value of equipment is $50,000 Morgan Corp does not guarantee the residual value of equipment at end of lease term Morgan Corp pays for all maintenance of equipment separate from lease No initial direct costs incurred by Morgan corp Hoffman Corp does not provide any incentives 1. How should Morgan Corp classify the lease? 2. How would Morgan Corp measure and record this lease? 3.  How would Morgan Corp measure the right-of-use asset and lease liability over the lease term?

The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company and Skysong Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2020 Lessor's implicit rate Lessee's incremental borrowing rate May 1, 2020 $15,349.90 $6,000 50 10 $65,000 $76,000 4 years years 96 The collectibility of the lease payments by Sheridan is probable. Prepare a lease amortization schedule for Skysong for the 5-year lease term

Salaur Company is evaluating a lease arrangement being offered by TSP Company for use of a computer system. The lease is noncancelable, and in no case does Salaur receive title to the computers during or at the end of the lease term. The lease starts on January 1, 2017, with the first rental payment due on January 1, 2017. Additional information related to the lease is as follows. Check the below image for additional information AccountingAnalyze the lease capitalization criteria for this lease for Salaur Company. Prepare the journal entry for Salaur on January 1, 2017.AnalysisBriefly discuss the impact of the accounting for this lease for two common ratios: return on assets and debt to total assets.PrinciplesWhat element of faithful representation (completeness, neutrality, free from error) is being addressed when a company like Salaur evaluates lease capitalization criteria?

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pharoah Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate January 1, $126,840 $55,000 $50,000 6 years 6 years $653,000 9 % 9 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.

On January 1, 2021, National Insulation Corporation (NIC) leased equipment from United Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by NIC. Portions of the United Leasing's lease amortization schedule appear below: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Jan. 1 2021 2021 2022 2023 2024 2025 2026 1. 2. WN 3. 4. 2038 2039 2040 2041 7 Payments 14,500 14,500 14,500 14,500 14,500 14,500 14,500 14,500 14,500 38,449 5. 6. Net investment Effective Decrease in Interest Balance 11,800 11,584 11,351 11,099 10,827 5,250 4,510 3,711 2,848 Lease term Asset's residual value Effective annual interest rate Lease payments for United Lease payments for NIC 7. 8. Right-of-use asset Required: 1. What is the lease term In years? 2. What is the asset's residual value expected at the end of the lease term?…

he following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Ivanhoe Company, a lessee. Commencement date   January 1,   Annual lease payment due at the beginning of   each year, beginning with January 1,   $99,118   Residual value of equipment at end of lease term,   guaranteed by the lessee   $53,000   Expected residual value of equipment at end of lease term   $48,000   Lease term   6 years Economic life of leased equipment   6 years Fair value of asset at January 1,   $554,000   Lessor’s implicit rate   6 % Lessee’s incremental borrowing rate   6 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.Click here to view factor tables.             (a)     Your answer is partially correct.  Try again.     Prepare an amortization schedule that would be suitable for the lessee for the lease term.…