Pharoah Corporation owns equipment that cost $89,600 and has a useful life of 8 years with no salvage value. On January 1, 2025, Pharoah leases the equipment to Sheridan Inc. for one year for one rental payment of $16,800 on January 1. Assuming Sheridan (lessee) elects to use the short-term lease exception, prepare Sheridan's 2025 journal entry. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Pharoah Corporation owns equipment that cost $89,600 and has a useful life of 8 years with no salvage value. On January 1, 2025, Pharoah leases the equipment to Sheridan Inc. for one year for one rental payment of $16,800 on January 1. Assuming Sheridan (lessee) elects to use the short-term lease exception, prepare Sheridan's 2025 journal entry. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 14RE: On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment....

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On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.
Carla Vista Corporation owns equipment that cost $94,400 and has a useful life of 8 years with no salvage value. On January 1, 2025, Carla Vista leases the equipment to Sandhill Inc. for one year for one rental payment of $17,700 on January 1. Assuming Sandhill (lessee) elects to use the short-term lease exception, prepare Sandhill's 2025 journal entry. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
On July 1, 2019, the Manaow Corp., signs a 10-year non-cancelable lease agreement for a storage building owned by Del Inc. The following information pertains to the lease agreement. Annual rental payment is P750,000 beginning July 1, 2019. The rental payment includes P50,000 for taxes and insurance. The fair value of the building on July 1, 2019 is P4,478,000. The building has an estimated economic life of 12 years. Unguaranteed residual value at the end of 10 years is P150,000. Implicit rate is 12%. Under IFRS 16, how much is the impact of the lease transaction to the income statement of Manaow Corp. dated December 31, 2019? A.P495,271 B.P470,271 C.P433,357 D. P408,357
Brent Corporation owns equipment that cost $80,000 and has a useful life of 8 years with no salvage value. On January 1, 2020, Brent leases the equipment to Havaci Inc. for one year for one rental payment of $15,000 on January 1. Assuming Havaci (lessee) elects to use the short-term lease exception, prepare Havaci's 2020 journal entries.
Bramble Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $300,000 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $100,800 payable each December 31, beginning December 31, 2019. An interest rate of 7% is implicit in the lease agreement. Collectibility of the rentals is not probable.Prepare any journal entry for Bramble 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
On January 1, 2021, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterestbearing note requiring $25,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. Required:1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar.2. How much interest expense will the company include in its 2021 and 2022 income statements for this note?3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note?
On July 1, 2019, the Manaow Corp., signs a 10-year non-cancelable lease agreement for a storage building owned by Del Inc. The following information pertains to the lease agreement. ❖ Annual rental payment is P750,000 beginning July 1, 2019. The rental payment includes P50,000 for taxes and insurance. ❖ The fair value of the building on July 1, 2019 is P4,478,000. ❖ The building has an estimated economic life of 12 years. Unguaranteed residual value at the end of 10 years is P150,000. ❖ Implicit rate is 12%. Under IFRS 16, how much is the impact of the lease transaction to the income statement of Manaow Corp. dated December 31, 2019? A. P495,271 B. P470,271 C. P433,357 D. P408,357
On September 1, 2021, DHI Sound System Company leased office furniture and equipment at a monthly rental of ₱40,000 for 3 years expiring August 31, 2024. As an inducement for DHI to enter into lease, the lessor permitted DHI to use the asset rent-free from September 1 to November 30, 2021. For the year ended December 31, 2021, how much TOTAL expense should DHI record related to the leased asset?
On January 1, 2019, Amity Company leases a crane to Baltimore Company. The lease contains the following terms and provisions: • The lease is noncancelable and has a term of 10 years. • The lease does not contain a renewal or bargain purchase option. • The annual rentals are $4,050, payable at the beginning of each year. • Baltimore agrees to pay all executory costs directly to a third party. • The cost of the equipment to the lessor is $25,266.10. The fair value of the equipment is $26,800. • Amity incurs initial direct costs of $1,380.75. • The interest rate implicit in the lease is 12%. • Amity expects to collect all lease payments from Baltimore. • Amity estimates that the fair value at the end of the lease term will be $3,160 and that the economic life of the crane is 12 years. This value is not guaranteed by Baltimore. Required: Prepare the journal entries for Amity for 2019.
On January 1, 2019, Amity Company leases a crane to Baltimore Company. The lease contains the following terms and provisions: • The lease is noncancelable and has a term of 10 years. • The lease does not contain a renewal or bargain purchase option. • The annual rentals are $4,050, payable at the beginning of each year. • Baltimore agrees to pay all executory costs directly to a third party. • The cost of the equipment to the lessor is $25,173.36. The fair value of the equipment is $26,700. • Amity incurs initial direct costs of $1,370.46. • The interest rate implicit in the lease is 12%. • Amity expects to collect all lease payments from Baltimore. • Amity estimates that the fair value at the end of the lease term will be $2,840 and that the economic life of the crane is 12 years. This value is not guaranteed by Baltimore. Prepare the journal entries for Amity for 2019.
Ebasan Company leased a building to Bu Corporation on January 1 2021. The lease expires on January 1 2026. The annual rental is P3,000,00D. Additionally, on January 1, 2021, Bu paid P500,000 as a lease bonus and P250,000 as a security deposit to be refunded upon expiration of the lease. Ebasan paid P150,000 to a real estate broker as finder fee. During 2021, Ebasan incurred insurance and property tax expense of P100,000. The building was depreciated P150,000 per year. What amount should Ebasan recognize as net rental revenue for 2021?
Peanut Industries leased exercise equipment to Green's Gyms on January 1, 2023. The lease does not meet the criteria for classification as a finance lease or a sales-type lease. The lease agreement specifies four payments of $50,000 beginning on January 1, 2023. The present value of those payments at a discount rate of 6% is $183,651. Which of the following is true regarding the entries made on January 1, 2023? O Peanut Industries records a credit to exercise equipment for $183,651. O Peanut Industries record a debit to cash for $50,000 O Green's Gyms records a debit to lease expense for $183,651 O Green's Gyms record a credit to lease payable of $50,000.