Sunland Leasing Company agrees to lease equipment to Coronado Corporation on January 1, 2020. The following information relates to the lease agreement. 1.   The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2.   The cost of the machinery is $489,000, and the fair value of the asset on January 1, 2020, is $699,000. 3.   At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Coronado estimates that the expected residual value at the end of the lease term will be 60,000. Coronado amortizes all of its leased equipment on a straight-line basis. 4.   The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5.   The collectibility of the lease payments is probable. 6.   Sunland desires a 9% rate of return on its investments. Coronado’s incremental borrowing rate is 10%, and the lessor’s implicit rate is unknown. (Assume the accounting period ends on December 31.) Click here to view factor tables. (a)   Your answer has been saved. See score details after the due date. Discuss the nature of this lease for both the lessee and the lessor. This is a                                                                         for Coronado. This is a                                                                         for Sunland.             Attempts: 1 of 1 used       (b)   Your answer has been saved. See score details after the due date. Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.) Annual rental payment   $              Attempts: 1 of 1 used       (c)     Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.) Present value of minimum lease payments   $        Save for Later     Attempts: 0 of 1 used Submit Answer     (d)

Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2020, is $700,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Jensen estimates that the expected residual value at the end of the lease term will be $50,000. Jensen amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is probable. 6. Glaus desires a 5% rate of return on its investments. Jensen's incremental borrowing rate is 6%, and the lessor's implicit rate is unknown. Instructions (Assume the accounting period ends on…

Blossom, Inc. leases a piece of equipment to Wildhorse Company on January 1, 2025. The contract stipulates a lease term of 5 years, with equal annual rental payments of $8,880 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. The asset has a fair value of $48,000, a book value of $43,000, and a useful life of 8 years. At the end of the lease term, Blossom expects the residual value of the asset to be $12,000, and this amount is guaranteed by a third party. Assuming Blossom wants to earn a 5% return on the lease and collectibility of the lease payments is probable, record its journal entry at the commencement of the lease on January 1, 2025. (List all debit entries before credit entries. Credit account titles are automatically

Assume that on January 1, 2021, Fredder Corporation sells equipment to Finance Co. for $1,700,000 and immediately leases back the equipment. The relevant information is as follows. 1. The equipment was carried on Fredder's books at a value of $1,500,000. 2. The term of the non-cancelable lease is 3 years; title will not transfer to Fredder, and the expected residual value at the end of the lease is $125,000, all of which is unguaranteed. 3. The lease agreement requires equal rental payments of $277,635 at the beginning of each year. 4. The incremental borrowing rate for Fredder is 7%. Fredder is aware that Finance set the annual rental to ensure a rate of return of 7%. 5. The equipment has a fair value of $1,700,000 on January 1, 2021, and an estimated economic life of 10 years. What type of lease is this for Fredder? What type of lease is this for Finance? Explain briefly. Prepare all necessary journal entries for the lessee for 2021. Prepare the 1/1/22 journal entry for the lessee.…