Crane Ltd. purchased land and constructed a service station, at a total cost of $459900. On January 2, 2022, when construction was completed, Crane sold the service station and land to a major oil company for $511000.00, and immediately leased it back from the oil company. Fair value of the land at the time of the sale was $51100.00. The lease is a 10-year, non-cancellable lease. Crane uses straight-line amortization for its other assets. The economic life of the station is 15 years with zero residual value. Title to the property will revert back to Crane at the end of the lease. Jan 02, 2022 Dec 31, 2022 Dec 31, 2023 Dec 31,2024 Payments $83162.90 83162.90 83162.90 O $404872 O $511000.00 O $478937 O $443668 Interest $51100.00 47893.71 44366,79 Amortization $32062.90 35269.19 38796.11 Balance $511000.00 478937.10 443667.91 404871.80 What is the amount of the lessee's obligation to the lessor after the December 31, 2024 payment? (Round to the nearest dollar.)

Crane Ltd. purchased land and constructed a service station, at a total cost of $459900. On January 2, 2022, when construction was completed, Crane sold the service station and land to a major oil company for $511000.00, and immediately leased it back from the oil company. Fair value of the land at the time of the sale was $51100.00. The lease is a 10-year, non-cancellable lease. Crane uses straight-line amortization for its other assets. The economic life of the station is 15 years with zero residual value. Title to the property will revert back to Crane at the end of the lease. Jan 02, 2022 Dec 31, 2022 Dec 31, 2023 Dec 31,2024 Payments $83162.90 83162.90 83162.90 O $404872 O $511000.00 O $478937 O $443668 Interest $51100.00 47893.71 44366,79 Amortization $32062.90 35269.19 38796.11 Balance $511000.00 478937.10 443667.91 404871.80 What is the amount of the lessee's obligation to the lessor after the December 31, 2024 payment? (Round to the nearest dollar.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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