On January 1, 2019, Ashly Farms leased a hay baler from Agrico Company. The lease requires Ashly to make $3,000 payments on January 1 of each year for 5 years beginning in 2019. The interest rate is 12%. Calculate the present value of Ashly's lease payments as of January 1, 2019.
Q: On January 1, 2020, Pia Co. engages in a lease contract to rent a property from Iris, Inc for an…
A: Present value of lease (right of use asset) = (Annual payment payable x PV of advance annuity for 5…
Q: On January 2, 2019, Charminster Corporation leased six computers for use in its engineering…
A: As per PFRS 16, Right of use asset is calculated by discounting the future lease payment at the…
Q: lessor company signs a sales-type lease agreement on December 31, 2020 to lease equipment to the…
A: Amount of cost of goods sold the lessor will record on December 31, 2020 = Cost of equipment =…
Q: On 1st of January 2019, Sohar SAOG and Salalah SAOC entered into a lease agreement. In the contract,…
A:
Q: Edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis…
A: Annual rental receipts = $100,000 Lease term = 5 years Interest rate implicit in the lease = 14%
Q: On December 31, 2019, Oriole Company leased machinery from Terminator Corporation for an agreed upon…
A: As per the accounting standard, A lease means where an asset owner gives his asset custody to some…
Q: Prepare Sheridans' December 31, 2019, journal entries assuming the implicit rate of the lease is 10%…
A: Particular year Cashflow PVF@ 10% PV of cashflows Lease receipts 0 $36100.00 1.000 $36100.00…
Q: ents of P1,300,000 beginning January 1, 2019. At the end of the lease term, December 31, 2023, the…
A: Finance lease liability will be the present value of annual lease payments and present value of…
Q: Crosley Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The…
A: a.Compute the amount of the lease receivable.
Q: Record the improvements to the truck by Marlon’s. Record the entry, if any, by the lessor to account…
A: Lease liability refers to obligation of the company requires to pay periodic lease payment on the…
Q: Carla Corporation enters into a 5-year lease of equipment on December 31, 2019, which requires 5…
A: A lease is an agreement where an asset is taken on rent and Lessor receives Lease rental in…
Q: On December 31, 2020, the lease agreement owned by Bahtera Maju (Tenant) and Sejahtera (the lessor)…
A: Capital lease: A lease is said to be a Capital Lease if the lease terms contain one of the following…
Q: On January 1, 2019, Solitaire Company leased equipment for 7 years. The lease is correctly…
A: Lease classify as sale type lease means it is a financial lease where lessor has given right to use…
Q: On January 1, 2019, Cage Company contracts to lease equipment for 5 years, agreeing to make a…
A: The chartered instrumentation is to be promoted at $550,000This implies there's associate choice to…
Q: On January 1, 2021, The Madrid Telephone Co. leased diagnostic equipment from Carlota Corp. The…
A: On 01.01.2021, Madrid Telephone Co. leased diagnostic equipment Annual lease payments = $85000 each…
Q: On January 2, 2019, Chats leased an office space for an annual rental of P600,000 payable every…
A: Lease liability The firm opt for the lease system which are incurred the management of the capital…
Q: On December 31, 2019, Splish Brothers Corporation signed a 5-year, non-cancelable lease for a…
A: Annual payment = $8,148 Borrowing rate = 10% PV Factor = 4.16987
Q: sharene entered into an agreement to lease an item of plant on 1st october 2019. The lease required…
A: Assets can be either current or non-current based on their term of life. Assets that lasts for more…
Q: Windsor Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7…
A: Leasee Windsor Corporation Lease Payment beginning of dec 31, 2019 $ 41,100 Period 7…
Q: On December 31, 2019, Escapee Company leased machinery from Terminator Corporation for an…
A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…
Q: On January 1, 2019. Eric, the lessee, and Betty, the lessor, signed a noncancelable lease agreement…
A: Lease: It is an agreement wherein one party allows another to use the assets for the specified…
Q: What portion of the P2,000,000 should be reported as current liability on December 31, 2019?
A: The determination of amount that should be reported as current liability on December 31, 2019 is…
Q: On January 1,2020, Andrea signs a 5-year noncancelable lease agreement to lease a heavy equipment to…
A: Annual Lease Payment: Lease payments are payments made in accordance with a lease agreement, in…
Q: On December 31, 2019, Burke Corporation signed a 5-year, non-cancelable lease for a machine. The…
A: a.) As per the question, it appears as an operating lease because the ownership rights are retained…
Q: Kaluzniak Corporation leased equipment to Moeller, Inc. on January 1, 2020. The lease agreement…
A: a. Operating lease: An operating lease is as often cancellable and incorporates maintenance.…
Q: Telephone Limited signed a contract with Machinery Leasing Company at 1st January 2020 to lease a…
A: Telephone Limited signed a contract with Machinery Leasing Company at 1st January 2020 to lease a…
Q: Wildhorse Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6…
A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…
Q: On January 1, 2021, Winn Heat Transfer leased office space under a three-year operating lease…
A: Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of…
Q: On January 1, 2019, Stacie signed a lease agreement with Amy. Amy will use the equipment and make…
A: There are two expenses associated with the lease of an asset. Lease Rental Expense and, Interest…
Q: Debbink Co. leased machinery from Young, Inc. on January 1, 2020. The lease term was for 8 years,…
A: Calculate fair value of asset:
Q: On 1st of January 2019, Sohar SAOG and Salalah SAOC entered into a lease agreement. In the contract,…
A: Answer is 'b'. OMR 1080 Fair market value of truck = OMR 25000 Less:- Annual lease payment =…
Q: On January 1,2020, Cookie Company leased an equipment from Sydney Company for 8 years with annual…
A: Initial measurement of Right-of-Use Asset and lease liabilities: Year PV Factor @ 10% Annual…
Q: Coronado Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7…
A: A lease is a contract laying out the terms under which one party consents to rent property claimed…
Q: On January 1,2019, Glen Company leased a building to Mix Company for 10-year term at an annual…
A: The questions are multiple choice questions. Required Choose the Correct Option.
Q: Whispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning…
A: The right to use an asset is the right of the lessee to use an asset over the life of the lease.
Q: On January 1, Espinoza Moving and Storage leased a truck for a four-year period, at which time…
A: Calculate present value of lease rent:
Q: Whispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning…
A: Liabilities: In monetary bookkeeping, a liability is characterized as the future penance of…
Q: Crosley Company, a machinery dealer, leased a machine to Dexter Corporation on 1 January 2019. The…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: Cullumber Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020.…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: On January 2, 2019, Charminster Corporation leased six computers for use in its engineering…
A:
Q: On January 1, 2021, Maroon Company entered into a five-year nonrenewable operating lease, commencing…
A: A lease is an agreement where the owner of the asset transfers the right of use of the asset to the…
Q: On January 1, 2018, JOSH Corporation leased out an office space for 15 years to PH Corporation at an…
A: Lease is a type of contract which provides the lessee the right to use the asset of the lessor and…
Q: On January 1 2020, Zincorne Corp. entered into an agreement to lease a specialized machine from…
A: Given data, FV=$10,000 Lease term (N) =5 years IBR(I)=9% Annual payments (PMT)=$33,200 Therefore,…
Q: Indiana Jones Corporation enters into a 6-year lease of equipment on December 31, 2019, which…
A: Calculate inital lease liability:
Q: Coronado Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7…
A: The lease liability includes the present value of cash payments in relation to the lease. In case,…
Q: Dream Company leased equipment for its nine-year economic life, agreeing to pay P500,000 at the…
A: Answer - As per IFRS 116 lease - lease liability is calculated on commencement date of Lease i.e…
Q: : How much is the interest expense for 2021? QUESTION 2: How much is the gain or loss on partial…
A: 1. If only 1 floor is rented - The annual lease payments will be reduced to P400,000 - The…
Q: On December 31, 2019, Splish Brothers Corporation signed a 5-year, non-cancelable lease for a…
A: Answer: As per given -
Q: Whispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning…
A: A lease can be defined as a contract by which one party grants the right to use the land, property,…
On January 1, 2019, Ashly Farms leased a hay baler from Agrico Company. The lease requires Ashly to make $3,000 payments on January 1 of each year for 5 years beginning in 2019. The interest rate is 12%.
Calculate the present value of Ashly's lease payments as of January 1, 2019.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would make in the first year of the lease assuming the lease is classified as a sales-type lease. Assume that the lessee is required to make payments on December 31 each year. Also assume that Richie had purchased the equipment at a cost of 200,000.On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910On January 1, 2021, Calloway Company leased a machine to Zone Corporation. The lease qualifies as a sales-type lease. Calloway paid $300,000 for the machine and is leasing it to Zone for $33,000 per year, an amount that will return 8% to Calloway. The present value of the lease payments is $300,000. The lease payments are due each January 1, beginning in 2021. What is the appropriate interest entry on December 31, 2021? Multiple Choice Cash Interest revenue. Cash Interest receivable Interest receivable Interest revenue. Interest receivable Interest revenue 24,000 21,360 21,360 24,000 24,000 21,360 21,360 24,000
- Timmer Company signs a lease agreement dated January 1, 2019,that provides for it to lease equipment from Landau Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: • The lease is noncancelable and has a term of 5 years. • The annual rentals are $83,222.92, payable at end of each year, and provide Landau with a 12% annual rate of return on its net investment. • Timmer agrees to pay all executory costs directly to a third party on December 1 of each year. In 2019, these were insurance, $3,760; property taxes, $5,440. In 2020: insurance, $3,100; property taxes, $5,330. • There is no renewal or barg purchase option. Timmer estimates that the equipment has a fair value of $300,000, an economic life of 5 years, and a zero residual value. Timmer’s incremental borrowing rate is 16%, it knows the rate implicit in the lease, and it uses the straightline method to record depreciation on similar equipment1. Calculate the amount of the asset and…On December 31, 2021, Yard Art Landscaping leased a delivery truck from Branch Motors. Branch paid $40,000 for the truck. Its retail value is $98,099.The lease agreement specified annual payments of $26,000 beginning December 31, 2021, the beginning of the lease, and at each December 31 through 2024. Branch Motors’ interest rate for determining payments was 10%. At the end of the four-year lease term (December 31, 2025) the truck was expected to be worth $16,000. The estimated useful life of the truck is five years with no salvage value. Both companies use straight-line amortization or depreciation.Yard Art guaranteed a residual value of $6,000. Yard Art’s incremental borrowing rate is 10% and is unaware of Branch’s implicit rate.A $1,000 per year maintenance agreement was arranged for the truck with an outside service firm. As an expedient, Branch Motors agreed to pay this fee. It is, however, reflected in the $26,000 lease payments.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of…Neal Company entered into a nine-year lease on a warehouse on Dec. 31, 2019. Lease payments of 520,000 which included executory cost of 20,000 is due annually, beginning on Dec. 31, 2020 and every Dec. 31 thereafter. The cost of restoring the underlying asset to its original condition as required by the contract is estimated at the present value of 200,000. The interest rate implicit in the lease is 9%. The PV of an ordinary annuity of 1 for nine years at 9% is 5.60. 1. What amount should be reported as lease liability on December 31,2020? a. ₱ 4,500,000 b. ₱ 2,912,000 c. ₱ 4,680,000 d. ₱ 2,800,000 2. What is the initial recognition of the right of use asset? a. ₱ 3,112,000 b. ₱ 2,800,000 c. ₱ 3,000,000 d. ₱ 4,700,000 3. What is the carrying value of the right of use asset on December 31, 2021? a. ₱ 2,520,000 b. ₱ 2,488,889 c. ₱ 2,750,000 d. ₱ 2,666,667
- On January 1, 2019, Jix'N leased two automobiles for executive use. The lease requires Jix'N to make five annual payments of P1,300,000 beginning January 1, 2019. At the end of the lease term, December 31, 2023, the entity guaranteed the residual value of the automobiles at P1,000,000. The lease qualifies as finance lease. The interest rate implicit in the lease is 9%. Present value factors for the 9% rate implicit in the lease are as follows: For an annuity due with 5 payments (in advance) 4.240 For an ordinary annuity with 5 payments 3.890 Present value of 1 for 5 periods 0.650 What is the finance lease liability immediately after the first required payment?On December 31, 2019, Lewis Corp. (Lewis), a publicly accountable entity, leased a tractor from Jade Leasing Corp. (JLC). The lease term is for seven years, after which the asset must be returned to JLC. The annual lease payments are $45,000, with the first payment due on December 31, 2019. The interest rate implicit in the lease is 6% and is known to Lewis. Lewis’s incremental borrowing rate is 5%. The guaranteed residual value of the tractor at the end of the lease term is $50,000, and Lewis expects that the tractor’s fair value when returned to JLC will be $30,000. Required: Prepare all journal entries required by Lewis for the tractor lease on December 31, 2019, and for the year ended December 31, 2020Cullumber Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $29,169 at the beginning of each year. The first payment is received on January 1, 2020. Cullumber had purchased the machine during 2019 for $109,000. Collectibility of lease payments by Cullumber is probable. Cullumber set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Cullumber at the termination of the lease. Prepare all necessary journal entries for Cullumber for 2020.
- On January 1, 2020, Eduardo Company leased two automobiles for executive use. The lease requires Eduardo Company to make five annual payments of P1,000,00 beginning January 1, 2020. At the end of the lease term, December 31, 2024, Eduardo Company guaranteed the residual value of the automobiles at P500,000. The lease is considered by the company as a finance lease. The interest rate implicit in the lease is 10%. What is the principal lease liability on December 31, 2021?The lessor company leases a building to the lessee company on 1/1/2021. The lessee will make ten annual rental payments of $77,000 at the beginning of each year, starting from 1/1/2021. Both parties expect a residual value of $17,000 at the end of the lease term, though this amount is not guaranteed. The lessor company set the lease payments with the intent of earning a 10% return, and the lessee is aware of this rate. Suppose the lessee incurs initial direct costs of $4,360 related to the lease. What is the amount for Right-of-Use Asset the lessee will record on 1/1/2021? (You must choose from the following present/future values. Please do not use the tables in the textbook, tables posted on the Blackboard, or values from a financial calculator.) Future Value Single Sum Present Value Single Sum Future Value Ordinary Annuity Present Value Ordinary Annuity Present Value Annuity Due 10%, 10 periods 2.59 0.39 15.94 6.14 6.76Ayayai Corporation leased equipment to Kingbird, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,151 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $9,900, a book value of $7,900, and Ayayai expects a residual value of $7,400 at the end of the lease term. Ayayai set the lease payments with the intent of earning a 4% return, though Kingbird is unaware of the rate implicit in the lease and has an incremental borrowing rate of 6%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Prepare all necessary journal entries for Kingbird in 2020