Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2024. Natick has the option to renew the lease at the end of two years for an additional three years. Natick is subject to a $40,000 penalty after two years if it fails to renew the lease. Framingham Leasing purchased the equipment from Waltham Machines at a cost of $153,238. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Related Information: Lease termi Lease renewal option for an additional Quarterly lease payments Economic life of asset Interest rate charged by the lessor 2 3 $10,000 5 12% years (8 quarterly periods) years (12 quarterly periods) at January 1, 2024, and at March 31, June 30, September 30, and December 31 thereafter years Required: Prepare appropriate entries for Natick Industries from the beginning of the lease through March 31, 2024. Appropriate adjusting entries are made quarterly. Note: If no entry is required for
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- On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two-year operating lease agreement from Computer World Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $95, 000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare appropriate journal entries recorded by Nath - Langstrom Services for the first year of the lease. Prepare appropriate journal entries recorded by Computer World Leasing for the first year of the lease.On January 1, 2021, Nath-Langstrom Services, Inc. a computer software training firm, leased serveral computers under a two-year operating lease agreement from Computer World Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $10,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by Computer World at a cost of $90,000 and were expected to have a useful life of 5 years with no residual value. Both firms record amortization and depreciation semiannually. Required: Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the beginning of the lease through the end of 2021.On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $10,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $90,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually.Required:Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the beginning of the lease through the end of 2021.
- On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $14,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $98,000 and were expected to have a useful life of seven years with no residual value. Both firms record amortization and depreciation semiannually. (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.) Required: 1.Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease. Journal entry worksheet Record the beginning of the lease for Nath-Langstrom Services. Record the leases payment made by Nath-Langstrom Services.…On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $16,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $102,000 and were expected to have a useful life of six years with no residual value. Both firms record amortization and depreciation semiannually. (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.) Required:1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $14,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $98,000 and were expected to have a useful life of seven years with no residual value. Both firms record amortization and depreciation semiannually. (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.) Required: 2 2. Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field). Round your intermediate calculations and final…
- On January 1, 2021, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $11,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $93,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually. Required: 1. Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease. Record the beginning of the lease for Nath-Langstrom Services (January 1, 2021). Record the lease payment made by Nath-Langstrom Services (June 30, 2021). Record amortization for Nath-Langstrom Services (June 30, 2021). Record the lease payment made by Nath-Langstrom Services (December 31,…On January 1, 2018, Nath-Langstrom Services, Inc. a computer software training firm, leased several computersunder a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipmentfor other firms at an annual interest rate of 4%. The contract calls for four rent payments of $10,000 each, payablesemiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a costof $90,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually.Required:Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the beginning of the lease throughthe end of 2018.On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $10,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $90,000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semi-annually. Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lease through the end of 2018. Only typing answer Please explain step by step
- On January 2, 2019, Charminster Corporation leased six computers for use in its engineering department. The lease period is five years and the estimated economic life of the leased property is six years. The lease does not contain automatic title transfer and a bargain purchase option. Annual lease payments are payable in advance every January 2 in the amount of P90,000. The incremental borrowing rate for Charminster Corporation is 12% and the implicit interest rate (known to Charminster) is 10%. The company uses straight-line depreciation for this type of equipment. (Use two decimal places for the PV factors) 1. What is the capitalized cost of the right of use asset? 2. How much is the interest expense recognized in profit of loss for the year 2019?Pearl Inc. was incorporated in 2019 to operate as a financial service firm, with an accounting fiscal year ending April 30. Pearl’s primary product is a sophisticated online investment management system; its customers pay a fixed fee plus a usage charge for using the system.Pearl has leased a large, GenX computer system from the manufacturer. The lease calls for a monthly rental of $19,000 for the 144 months (12 years) of the lease term. The estimated useful life of the computer is 14 years.All rentals are payable on the first day of the month beginning with April 1, 2020, the date the computer was installed and the lease agreement was signed. The lease is non-cancelable for its 12-year term, and it is secured only by the manufacturer’s chattel lien on the GenX system.This lease is to be accounted for as a finance lease by Pearl, and the asset will be amortized by the straight-line method. Borrowed funds for this type of transaction would cost Pearl 6% per year (0.5% per month).…To raise operating funds, North American Courier Corporation sold its building on January 1, 2016, to an insurance company for $500,000 and immediately leased the building back. The lease is for a 10-year period ending December 31, 2025, at which time ownership of the building will revert to North American Courier. The building has a book value of $400,000 (original cost $1,000,000). The lease requires North American to make payments of $88,492 to the insurance company each December 31. The building had a total original useful life of 30 years with no residual value and is being depreciated on a straight-line basis. The lease has an implicit rate of 12%. Required: 1. Prepare the appropriate entries for North American on (a) January 1, 2016, to record the sale-leaseback and (b) December 31, 2016, to record necessary adjustments. 2. Show how North American’s December 31, 2016, balance sheet and income statement would reflect the sale-leaseback.