- The Lease Agreement And Related Facts Indicate The Following A Leased Equipment Had A Retall Cash Selling Price Of 44 1 (54.46 KiB) Viewed 31 times
- The Lease Agreement And Related Facts Indicate The Following A Leased Equipment Had A Retall Cash Selling Price Of 44 2 (51.4 KiB) Viewed 31 times
The lease agreement and related facts Indicate the following: a. Leased equipment had a retall cash selling price of $440,000. Its useful life was four years with no residual value. b. The lease term was four years and the lessor pald $335,000 to acquire the equipment (thus, selling profit). c. Lessor's Implicit rate when calculating annual lease payments was 8%. d. Annual lease payments beginning January 1, 2021, the beginning of the lease, were $123,005. e. Incremental costs of commissions for brokering the lease and consummating the completed lease transaction incurred by the lessor were $8,900. Required: 1. & 2. Prepare the appropriate entries for the lessor to record the lease and the initial payment at its commencement and any entry(s) necessary at December 31, 2021, the fiscal year-end. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record accrued interest. Note: Enter debits before credits. General Journal Date December 31, 2021 Interest receivable interest revenue Debit Credit
A lease agreement that qualifies as a finance lease calls for annual lease payments of $20,000 over a eight-year lease term (also the asset's useful life), with the first payment at January 1, the beginning of the lease. The interest rate is 4%. The lessor's fiscal year is the calendar year. The lessor manufactured this asset at a cost of $128,000. (FV of $1, PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: a. Determine the price at which the lessor is "selling" the asset (present value of the lease payments). b. Create a partial amortization table through the second payment on January 1, 2017. c. What would be the increase in earnings that the lessor would report in its Income statement for the year ended December 31, 2016 (ignore taxes)? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C What would be the increase in earnings that the lessor would report in its income statement for the year ended December 31, 2016 (ignore taxes)? (Input decreases to income as negative amounts. Round your answers to nearest whole number.) Pretax impact on income related to the lease: Cost of goods sold (128,000) Sales revenue 17,505 Interest revenue 4,802 Total pretax impact on income $-105,093 < Required B