Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,300 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Effective Decrease in Outstanding Payment Payment Interest Balance Balance 1 2 3 4 5 6 8,900 8,900 8,900 8,900 8,900 2,300 ?? 2,964 2,370 1,717 ?? 209 ?? 5,936 6,530 7,183 ?? 2,091 38,540 29,640 23,704 17,174 9,992 ?? 0 What amount would the lessee record as annual amortization on the asset using the straight-line method, assuming no residual value? (Round your answer to the nearest whole dollar.)
Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,300 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Effective Decrease in Outstanding Payment Payment Interest Balance Balance 1 2 3 4 5 6 8,900 8,900 8,900 8,900 8,900 2,300 ?? 2,964 2,370 1,717 ?? 209 ?? 5,936 6,530 7,183 ?? 2,091 38,540 29,640 23,704 17,174 9,992 ?? 0 What amount would the lessee record as annual amortization on the asset using the straight-line method, assuming no residual value? (Round your answer to the nearest whole dollar.)
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
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 9RE: Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would...
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