On January 1, 2016, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers from ComputerWorld Corporation under a two-year operating lease agreement. 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 six years with no residual value. Required: Prepare the appropriate entries for both (a) the lessee and (b) the lessor from the inception of the lease through the end of 2016. (Use straight-line depreciation.)

Fundo entered into a 20-year operating lease for a property on 1 October 2000 which has a remaining life of eight years at 1 October 2012. The rental payments are $2.3 million per annum. Prior to 1 October 2012, Fundo obtained permission from the owner of the property to make some internal alterations to the property so that it can be used for a new manufacturing process which Fundo is undertaking. The cost of these alterations was $7 million and they were completed on 1 October 2012 (the time taken to complete the alterations can be taken as being negligible). A condition of being granted permission was that Fundo would have to restore the property to its original condition before handing back the property at the end of the lease. The estimated restoration cost on 1 October 2012, discounted at 8% per annum to its present value, is $5 million.   Required: (a) Explain how the lease, the alterations to the leased property and the restoration costs should be treated in the financial…

Wildhorse, Inc. manufactures machinery used in the mining industry. On January 2, 2021 it leased equipment with a cost of $570000 to Silver Point Co. The 5-year lease calls for a 10% down payment and equal annual payments of $190966 at the end of each year. The equipment has an expected useful life of 5 years. Silver Point's incremental borrowing rate is 9%, and it depreciates similar equipment using the double - declining balance method. The selling price of the equipment is $870000, and the rate implicit in the lease is 7%, which is known to Silver Point Co. What is the book value of the leased asset at December 31, 2021? $696000 $522000 $870000 $556800

On January 1, Keunho Industries leased equipment to a customer for a four-year perlod, at which time possession of the leased asset will revert back to Keuntia The equipment cost Keunho $270,000 and has an expected useful life of six years. Its normal sales price is $270,000. The residual value after four years is $100,000 Lease payments are due on December 31 of each year, beginning with the first payment at the end of the first year. The interest rate is 9% What is the amount of the annual lease payments? Note: Round your answer to the nearest whole dollar amount. The present value of $t: n=4,/9% is 0.70843 The present value of an ordinary annuity of $1: n=4, / -9% is 3.23972. The present value of an annuity due of $1: n=4./=9% is 3.53129. Multiple Choice O $54,166 $56,398 4

Werner Chemical, Inc., leased a protein analyzer on September 30, 2016. The five-year lease agreement calls for Werner to make quarterly lease payments of $391,548, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2016. Werner’s incremental borrowing rate is 12%. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. Required: 1. Determine the present value of the lease payments at September 30, 2016 (to the nearest $000). 2. What amounts related to the lease would Werner report in its balance sheet at December 31, 2016 (ignore taxes)? 3. What amounts related to the lease would Werner report in its income statement for the year ended December 31, 2016 (ignore taxes)? 4. What amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2016 (ignore taxes)?

On December 31, 2013, Corporation A leased equipment to Company B for a five-year period. The annual lease payment, excluding executory costs is $42,000. The interest rate for this lease is 10%. The payments are due on December 31 of each year. The first payment was made on December 31, 2013. The normal cash price for this type of equipment is $150,000 while the cost to Corporation A was $118,000. For the year ended December 31, 2013, by what amount will Corporation A's pretax earnings increase from this lease?

6. Cheyenne Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $276,779, and its unguaranteed residual value at the end of the lease term is estimated to be $18,400. National will pay annual payments of $39,900 at the beginning of each year. Cheyenne incurred costs of $189,300 in manufacturing the equipment and $3,700 in sales commissions in closing the lease. Cheyenne has determined that the collectibility of the lease payments is probable and that the implicit interest rate is 10%.Click here to view factor tables. (a)     Discuss the nature of this lease in relation to the lessor.This is a                                                                        .Compute the amount of each of the following items. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g.…

Gordon Inc., a private company that follows ASPE, entered into a lease agreement with Canada Leasing Corporation to lease a warehouse for six years.  Annual lease payments are $21,000, payable at the beginning of each lease year.  Gordon Inc. signed the lease agreement on January 1, 2021, and made the first payment on that date. At the end of the lease, the machine will revert back to Canada Leasing Corporation.  The normal useful life of the warehouse is 10 years.  At the time of the lease, the warehouse could be purchased for $108,000.  Gordon does not know the implicit rate of the lease; Gordon's incremental borrowing rate is 10%.  Gordon uses straight-line depreciation for this type of asset. Required: Using the three criteria under ASPE, prove whether this is an operating or capital lease. Prepare a lease amortization schedule for the lease.  Round all amounts to the nearest dollar. Prepare the journal entries for 2021 and 2022 for Gordon Inc.  Round amounts to the nearest…

Crane Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $85,500. Under the 3-year, non-cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has à 3-year useful life and no residual value. The lease was signed on January 1, 2020. Crane expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020. Click here to view factor tables. (b) Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g. 5,275.) Date /1/20 12/31/20 2/31/21 2/31/22 Rent Receipt/ Payment Interest Revenue/ Expense $ Reduction of Principal $ Receivable/Lia 1 SUPPORT

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