Blossom Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $814,000 are made at the end of each year. The present value of the lease payments at 12% is $3,715,000. Blossom uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). prepare an amortization table for 2021 ND 2022

Blossom Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $814,000 are made at the end of each year. The present value of the lease payments at 12% is $3,715,000. Blossom uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). prepare an amortization table for 2021 ND 2022

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 9RE: Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would...

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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.
Sandhill Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $772,000 are made at the end of each year. The present value of the lease payments at 11% is $3,638,000. Sandhill uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). (a) Prepare an amortization table for 20121 and 2022. Sandhill Co.Lease Amortization Schedule Date Annual LeaseReceipt/Payment Interest onReceivable/Liability Reduction inReceivable/Liability LeaseReceivable/Liability 1/1/21 $ 12/31/21 $ $ $ 12/31/22
Hughey Co. as lessee records a capital lease of machinery on January 1, 2020. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and sum-of-the-years’-digits depreciation (no residual value). (a) Prepare an amortization table for 2020 and 2021. (b) Prepare all of Hughey’s journal entries for 2020.
Benjamin Co. as lessee records a finance lease of a machine on January 1, 2021. The nineannual lease payments of $925,000 are made at the beginning of each year. The present valueof the lease payments at 7%, including the first payment, is $6,448,451. Hughey uses theeffective-interest method of amortization and straight-line depreciation (no residual value). Prepare and present an amortization table that includes payments for 2021, 2022, and2023 (i.e., stop after presenting the numbers for the third payment).
On January 1, 2021, the lessee company signed an operating lease to lease a building from the lessor. The lease arrangement is for 8 years. Lease payments are $168,000 per year and are made at the beginning of the year. The lessee incurred initial direct costs of $65,000. Assume the following is the partial Lease Amortization Schedule (with only two rows and three columns shown) prepared by the lessee company: Date Annual Payment Interest on Liability 1/1/2022 168,000 40,000 1/1/2023 168,000 36,000 In the journal entry made on December 31, 2022, the lessee company should debit/credit Right-of-Use Asset by $___________. (Just enter the amount. Do not put a plus or minus sign in front of the amount.)
Crane Co. as lessee records a finance lease of machinery on January 1, 2021. The seven annual lease payments of $819,000 are made at the end of each year. The present value of the lease payments at 9% is $4,122,000. Crane uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value).
Tamarisk Corporation recorded a right-of-use asset for $259,700 as a result of a finance lease on December 31, 2019. Tamarisk’s incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Tamariskmade the first lease payment of $49,651 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no residual value.Prepare Tamarisk's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit…
On January 1, 2021, Flackmon Company entered into a lease for a truck with a payment of S16,000 per year for 4 years. The expected life of the truck is 5 years, and the first payment will be made immediately. Flackmon could obtain a loan for a similar amount at a rate of 8% per year. Required: A. Record the lease liability and the first payment on January 1, 2021. B. Record the amortization on the leased asset for 2021. C. Record interest for 2021 on the lease. D. Record the lease payment on January 1, 2022. Your answers to this open-ended assignment should be placed in the space below this line. A Date Account Name Debit Credit Jan. 1, 2021 1-Jan-21 B Date Account Name Debit Credit Dec. 31, 2021 C Date Account Name Debit Credit Dec. 31, 2021 D Date Account Name Debit Credit Jan. 1, 2022
Cady Salons leased equipment from Smith Co. on January 1, 2021, in an operating lease. The present value of the lease payments discounted at 8% was $129,700. Ten annual lease payments of $17,900 are due at each January 1 beginning January 1, 2021. The amortization of the right-of-use asset for the reporting year ending December 31, 2021, would be:
On January 1, 2021, PokemonGo Company leased equipment to Waldo Corporation under a lease agreement that qualifies as an operating lease to Waldo. The present value of the end-of-year lease payments of $166,554 discounted at 8% is $665,000. The expected economic life of the asset is seven years. The lease term is five years. What would Waldo record as amortization in 2021?
On January 1, 2021, Green Co. recorded a right-of-use asset of $270,360 in an operating lease. The lease calls for ten annual payments of $40,000 at the beginning of each year. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset at December 31, 2021, will be:
Hughey Co. as lessee records a capital lease of machinery on January 1, 2018. The seven annual lease payments of $875,000 are made at the end of each year. The present value of the lease payments at 10% is $4,260,000. Hughey uses the effective-interest method of amortization and Straight-line Depreciation over 7 years (no residual value). Instructions (Round to the nearest dollar.) (a) Prepare an amortization table for 2018 and 2019. (b) Prepare all of Hughey’s journal entries for 2018.