Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Carla Vista Corp will record for the right-of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 5,275.76.) The amount of the right-of-use asset $ Prepare the initial entry to reflect the signing of the lease agreement. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 5,125.76.) Date July 1, 2023 Account Titles and Explanation Debit Credit On July 1, 2023, Carla Vista Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Sunland Ltd. The following information concerns the lease agreement. 1. The equipment's fair value on July 1, 2023 is $267,000. 2. The agreement requires equal rental payments of $59,500.00 beginning on July 1, 2023. 3. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $86,600. Carla Vista Corp. depreciates similar equipment using the straight-line method, with no residual value. 4. The lease is non-renewable. At the termination of the lease, the equipment reverts to Sunland. 5. 6. Carla Vista's incremental borrowing rate is 5% per year. The lessor's implicit rate is not known by Carla Vista Corp. The yearly rental payment includes $7.126.37 of executory costs related to insurance on the equipment. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Carla Vista Corp will record for the right-of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 5,275.76.) The amount of the right-of-use asset $ Prepare the initial entry to reflect the signing of the lease agreement. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 5,125.76.) Date July 1, 2023 Account Titles and Explanation Debit Credit On July 1, 2023, Carla Vista Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Sunland Ltd. The following information concerns the lease agreement. 1. The equipment's fair value on July 1, 2023 is $267,000. 2. The agreement requires equal rental payments of $59,500.00 beginning on July 1, 2023. 3. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $86,600. Carla Vista Corp. depreciates similar equipment using the straight-line method, with no residual value. 4. The lease is non-renewable. At the termination of the lease, the equipment reverts to Sunland. 5. 6. Carla Vista's incremental borrowing rate is 5% per year. The lessor's implicit rate is not known by Carla Vista Corp. The yearly rental payment includes $7.126.37 of executory costs related to insurance on the equipment. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Chapter3: Setting Up A New Company
Section: Chapter Questions
Problem 2.2C
Related questions
Question
Transcribed Image Text:Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Carla Vista Corp will record for the
right-of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g.
5,275.76.)
The amount of the right-of-use asset
$
Prepare the initial entry to reflect the signing of the lease agreement. (List all debit entries before credit entries. Credit account titles
are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account
titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 5,125.76.)
Date
July 1,
2023
Account Titles and Explanation
Debit
Credit
Transcribed Image Text:On July 1, 2023, Carla Vista Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from
Sunland Ltd. The following information concerns the lease agreement.
1.
The equipment's fair value on July 1, 2023 is $267,000.
2.
The agreement requires equal rental payments of $59,500.00 beginning on July 1, 2023.
3.
The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $86,600. Carla Vista Corp.
depreciates similar equipment using the straight-line method, with no residual value.
4.
The lease is non-renewable. At the termination of the lease, the equipment reverts to Sunland.
5.
6.
Carla Vista's incremental borrowing rate is 5% per year. The lessor's implicit rate is not known by Carla Vista Corp.
The yearly rental payment includes $7.126.37 of executory costs related to insurance on the equipment.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
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