Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 5, Problem 5.20E
Lease payments
• LO6–9
On June 30, 2018, Fly-By-Night Airlines leased a jumbo jet from Boeing Corporation. The terms of the lease require Fly- By-Night to make 20 annual payments of $400,000 on each June 30. Generally accepted accounting principles require this lease to be recorded as a liability for the present value of scheduled payments. Assume that a 7% interest rate properly reflects the time value of money in this situation.
Required:
- 1. At what amount should Fly-By-Night record the lease liability on June 30, 2018, assuming that the first payment will be made on June 30, 2019?
- 2. At what amount should Fly-By-Night record the lease liability on June 30, 2018, before any payments are made, assuming that the first payment will be made on June 30, 2018?
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Problem 4
On January 1, 2021, Twice Company entered into a lease agreement with the following:
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Present value of an ordinary annuity at 12% for 12 periods
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following information:
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5.759
1. What amount should be reported as lease liability on January 1, 20217
2. What amount should be reported as additional lease liability on January 1, 2024?
3. What amount should be reported as total interest expense for 20247
PROBLEM 8: Lease agreement with VARIABLE PAYMENTS
Li Zi Company entered into a lease of building on January 1, 2020. The lease contract provided the following information: Lease term 10 years Estimated useful life of leased asset 12 years Annual rental payable at end of each year for the first 5 years 400,000 Annual rental payable at end of each year for the next first 5 years 550,000 Interest rate implicit in the lease 10% No purchase option nor transfer of title REQUIRED: Prepare table of amortization and journal entries for the entire lease term.
Problem C- Garol Gym
On January 1, 2016. Garol Gym leased equipment under a finance lease. The lease agreement specified
payments of P37.000 per year (payable each year on December 31. starting at the end of 2016) for 8
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Required
a. Calculate the present value of the lease.
b. Journalize the lease arrangement on Garol's blook on January 1, 2016.
b. Prepare an amortization schedule of all the lease payments.
obok
Chapter 5 Solutions
Intermediate Accounting, 10 Ed
Ch. 5 - Prob. 5.1QCh. 5 - Explain compound interest.Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - What is an annuity?Ch. 5 - Explain the difference between an ordinary annuity...Ch. 5 - Prob. 5.9QCh. 5 - Prepare a time diagram for the present value of a...
Ch. 5 - Prepare a time diagram for the present value of a...Ch. 5 - What is a deferred annuity?Ch. 5 - Assume that you borrowed 500 from a friend and...Ch. 5 - Compute the required annual payment in Question...Ch. 5 - Explain how the time value of money concept is...Ch. 5 - Prob. 5.1BECh. 5 - Prob. 5.2BECh. 5 - Prob. 5.3BECh. 5 - Present value; single amount LO63 John has an...Ch. 5 - Present value; solving for unknown; single amount ...Ch. 5 - Future value; ordinary annuity LO66 Leslie...Ch. 5 - Future value; annuity due LO66 Refer to the...Ch. 5 - Prob. 5.8BECh. 5 - Prob. 5.9BECh. 5 - Prob. 5.10BECh. 5 - Solve for unknown; annuity LO68 Kingsley Toyota...Ch. 5 - Price of a bond LO69 On December 31, 2018,...Ch. 5 - Lease payment LO69 On September 30, 2018,...Ch. 5 - Prob. 5.1ECh. 5 - Future value; single amounts LO62 Determine the...Ch. 5 - Prob. 5.3ECh. 5 - Prob. 5.5ECh. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.10ECh. 5 - Deferred annuities LO67 Required: Calculate the...Ch. 5 - Solving for unknowns; annuities LO68 For each of...Ch. 5 - Solving for unknown annuity amount LO68 Required:...Ch. 5 - Prob. 5.15ECh. 5 - Price of a bond LO69 On September 30, 2018, the...Ch. 5 - Price of a bond; interest expense LO69 On June...Ch. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Lease payments LO69 On June 30, 2018,...Ch. 5 - Lease payments; solve for unknown interest rate ...Ch. 5 - Analysis of alternatives LO63, LO67 Esquire...Ch. 5 - Analysis of alternatives LO63, LO67 Harding...Ch. 5 - Investment analysis LO63, LO67 John Wiggins is...Ch. 5 - Prob. 5.5PCh. 5 - Prob. 5.6PCh. 5 - Deferred annuities LO67 On January 1, 2018, the...Ch. 5 - Prob. 5.8PCh. 5 - Noninterest-bearing note; annuity and lump-sum...Ch. 5 - Prob. 5.10PCh. 5 - Solving for unknown lease payment LO68, LO69...Ch. 5 - Solving for unknown lease payment; compounding...Ch. 5 - Lease v s. buy alternatives LO63, LO67, LO69...Ch. 5 - Prob. 5.14PCh. 5 - Prob. 5.15PCh. 5 - Prob. 5.1DMPCh. 5 - Prob. 5.2DMPCh. 5 - Prob. 5.3DMPCh. 5 - Prob. 5.4DMPCh. 5 - Judgment Case 65 Replacement decision LO63, LO67...Ch. 5 - Prob. 5.6DMPCh. 5 - Prob. 5.7DMP
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