On January 1, 2013, R Corporation leased equipment to Hela Company. The lease term is 9 years. The first payment of $452,000 was made on January 1, 2013. Remaining payments are made on December 31 each year, beginning with December 31, 2013. The equipment cost R Corporation $2,457,400. The present value of the minimum lease payments is $2,697,400. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 12%, what will be the balance reported as a liability by Hela in the December 31, 2014, balance sheet?

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On January 1, 2021, Wise Corporation leased equipment to Slim Company. The lease term is eight years. The first payment of $675,000 was made on January 1, 2021. The equipment cost Wise Corporation $3,600,000. The present value of the lease payments is $3,961,183. The lease is appropriately classified as a sales-type lease. suming the interest rate for this lease is 10%, how much interest revenue will Wise record in 2022 on this lease?   A. $261,000. B. $293,980. C. $325,350. D. $328,615.

edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis beginning January 1, 2013. The lease terms, provisions, and related events are as follows: 11 1. The lease term is 5 years. The lease is noncancelable and requires annual rental receipts of $100,00 to be made in advance at the beginning of eacy year. 2. The equipment costs $313,000. the equipment has an estimatd life of 6 years and, at the end of the lease term, has an unguaranteed residual value of $20,000 accruing to the benefit of Edom. 3. Davis agrees to pay all executory costs. 4. The interest rate implicit in the leae is 14%. 5. The intial direct costs are insignificant and assumed to be zero. 6. The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor. Prepare journal entries for Edom for the years 2013 and 2014.  Do not give answer in image formate

edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis beginning January 1, 2013. The lease terms, provisions, and related events are as follows: 11 1. The lease term is 5 years. The lease is noncancelable and requires annual rental receipts of $100,00 to be made in advance at the beginning of eacy year. 2. The equipment costs $313,000. the equipment has an estimatd life of 6 years and, at the end of the lease term, has an unguaranteed residual value of $20,000 accruing to the benefit of Edom. 3. Davis agrees to pay all executory costs. 4. The interest rate implicit in the leae is 14%. 5. The intial direct costs are insignificant and assumed to be zero. 6. The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor. Prepare journal entries for Edom for the years 2013 and 2014.

Berne Company (lessor) enters into a lease with Fox Company to lease equipment to Fox beginning January 1, 2016. The lease terms, provisions, and related events are as follows: 1. The lease term is 4 years. The lease noncancelable and requires annual rental payments of $50,000 to be made at the end of each year. 2. The equipment costs $130,000. The equipment has an estimated life of 4 years and an estimated residual value at the end of the lease term of zero 3. Fox agrees to pay all executory costs. 4. The interest rate implicit in the lease is 12%. 5. The initial direct costs are insignificant and assumed to be zero. 6. The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor. Required: 1. Next Level Determine if the lease is a sales-type or direct financing lease from Berne's point of view (calculate the selling price and assume that this is also the fair value).…

Eubank Company, a lessee, enters into a lease agreement on January 1, 2021, for equipment. The following data are relevant to the lease agreement: - The term of the noncancelable lease is 4 years. Payments of $978,446 are due on January 1 of each year. The first payment is January 2021. - The fair value of the equipment on January 1, 2021 is $3,500,000. The equipment has an economic life of 6 years with nosalvage value. - Eubank uses the straight-line method of depreciation. - Eubank’s implicit rate is 8%. - This will be treated as a finance lease (Lessee Perspective).   Instructions: Prepare the journal entries on Eubank’s books (lessee) that relate to the lease agreement for the following dates, you do not need to create an amortization schedule. a. January 1, 2021. b. December 31, 2021.

Sunland Company leases equipment from Bridgeport Inc. for five years starting on January 1, 2025. The lease is properly classified as a finance/sales-type lease. The terms of the lease are as follows: a) Bridgeport will pay $2500 in legal fees to execute the lease. b) Bridgeport will incur $1500 of lease documentation costs after the execution of the lease. c) Sunland will pay commissions to the lease negotiator of $2500. d) Sunland must prepay the last month's rental payment of $12500. e) Sunland pays internal engineering costs of $6250 to identify any structural considerations when installing the equipment. f) The initial measurement of the liability for Sunland is $150000. What amount will be reported for Sunland's right-of-use asset at the commencement date? O $168750 O $150000 O $171250 O $169000

Sax Company signs a lease agreement dated January 1, 2016, that provides for it to lease computers from Appleton Company beginning January 1, 2016. The lease terms, provisions, and related events are as follows: 1. The lease term is 5 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year. 2. The computers have an estimated life of 5 years, a fair value of $300,000, and a zero estimated residual value. 3. Sax agrees to pay all executory costs. 4. The lease contains no renewal or bargain purchase option. 5. The annual payment is set by Appleton at $83,222.92 to earn a rate of return of 12% on its net investment. Sax is aware of this rate, which is equal to its borrowing rate. 6. Sax uses the straight-line method to record depreciation on similar equipment. Required: 1. Next Level Examine and evaluate each capitalization criteria and determine what type of lease this is for Sax. 2. Calculate the amount of the asset and liability of Sax at…

On January 1, 2020, Cullumber Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $1,000, while the expected residual value at the end of the lease is $6,000.2. Equal rental payments are due on January 1 of each year, beginning in 2020.3. The fair value of the equipment on January 1, 2020, is $180,000, and its cost is $150,000.4. The equipment has an economic life of 8 years. Flynn depreciates all of its equipment on a straight-line basis.5. Cullumber sets the annual rental to ensure a 7% rate of return. Flynn’s incremental borrowing rate is 8%, and the implicit rate of the lessor is unknown.6. Collectibility of lease payments by the lessor is probable. Both the lessor and the lessee’s accounting periods end on December 31. Prepare all the necessary journal entries for Flynn for 2020.