Prepare the journal entries that the lessee should make to record the following transactions. The lessee makes a lease payment of $80,000 to the lessor in an operating lease transaction. Veatech Company leases a new building from Joel Construction, Inc. The present value of the lease payments is $700,000.The lease qualifies as a capital lease.

Prepare the journal entries that the lessee should make to record the following transactions. The lessee makes a lease payment of $80,000 to the lessor in an operating lease transaction. Veatech Company leases a new building from Joel Construction, Inc. The present value of the lease payments is $700,000.The lease qualifies as a capital lease.

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 5RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...

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Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the first year of the lease assuming the lease is classified as a finance lease. However, assume that Garvey is now required to make the 65,949.37 payments on January 1 each year and that the fair value at the lease inception is now 275,000 (65,949:37 4:169865).
Prepare an amortization table for the five-year term of the lease. Prepare journal entries in the books of Generous, Inc. for years 2022 and 2023 to record all transactions relating to the lease. Prepare the journal entry at the end of the lease term to record the transfer of the leased automobiles to the lessor.
1. 2. The lessee makes a lease payment of $75,200 to the lessor for equipment in an operating lease transaction. Wildhorse Company leases equipment from Noble Construction Inc. The present value of the lease payments is $658,000. The lease qualifies as a capital lease.. Prepare the journal entries that the lessee should make to record the above transactions assuming the entities report under ASPE. (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.) No. Account Titles 1. Debit Credit
On January 1, 2018, Naw Corporation leased a piece of machinery from Hoffherr Machinery's. The lease is a(n) 10 year, non-cancellable lease that requires lease payments of $5,000 due at the beginning of each year. The lease has been determined to be a capital lease because at least one of the classification criteria has been met. Naw Corporation needs to determine the present value of the lease payments so that they can record the asset and the liability at lease inception. Hoffherr Machinery's implicit rate of 10% is known to Naw Corporation. Complete the following from the perspective of Naw Corporation. Which of the following financial statement items is impacted in this transaction? The problem is solving for: The calculation involves: Excel® Formula Variables = Total asset asset = asset PV To record the inception of the lease cash PV 33795 Accounts To record the first lease payment ( Rate ( .1 Date of Delivery Debit 33795 5000 Leases Obligation Present Value An Annuity Due Nper 10…
Brown Enterprises enter into a 4 year lease with ABC Leasing Company. The lease qualifies as an operating lease. The first lease payment of $100,000 was due on January 1, 2024, on the date the lease was executed and all subsequent lease payments due on December 31. The present value of the lease payments was $348,685 and Brown Enterprises correctly recorded the right of use asset and lease liability on January 1, 2024 for this amount. The implicit rate in the lease is 10%. On its 2024 income statement, when Brown Enterprises reports its lease expense for 2024, it will be made up of which of the following components? (Choose all that apply) DAROU amortization $75,132 8. Interest expense $12,829 OCROU amortization $87,171 OD. Interest expense $24,869 Quesdan 12 of 25
Sunland Company leases equipment from Bridgeport Inc. for five years starting on January 1, 2025. The lease is properly classified as a finance/sales-type lease. The terms of the lease are as follows: a) Bridgeport will pay $2500 in legal fees to execute the lease. b) Bridgeport will incur $1500 of lease documentation costs after the execution of the lease. c) Sunland will pay commissions to the lease negotiator of $2500. d) Sunland must prepay the last month's rental payment of $12500. e) Sunland pays internal engineering costs of $6250 to identify any structural considerations when installing the equipment. f) The initial measurement of the liability for Sunland is $150000. What amount will be reported for Sunland's right-of-use asset at the commencement date? O $168750 O $150000 O $171250 O $169000
(Lessee Entries with Residual Value) The following facts pertain to a noncancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee. Check the below image for facts. The lessee assumes responsibility for all executory costs, which are expected to amount to $5,000 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $50,000. The lessee uses the straight-line depreciation method for all equipment.Instructions(a) Prepare an amortization schedule that would be suitable for the lessee for the lease term.(b) Prepare all of the journal entries for the lessee for 2017 and 2018 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31 and reversing entries are used when appropriate.
Crane Company leases a new building from Noble Construction, Inc. The present value of the lease payments is $625,000. The lease is a finance lease. Prepare the journal entry that the lessee should make to record this transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Explain which of following would result in the lessee classifying the lease as a finance lease. a. The lease is for a major part of the economic life of the asset. b. The lease term is for 12 months or less. c. The lease transfers ownership of the asset at the end of the lease.
1. Refer to Item 4. At what amount should the lease liability be recognized at January 1, 2022, after making the first payment of P260,000 to the lessor? 2. Assuming that the residual value of the two automobiles amounted to P150,000 at the end of the lease term, prepare the journal entry to record the transfer of the leased automobiles to the lessor.
Marin Company leases a building and land. The lease term is 7 years and the annual fixed payments are $880,000. The lease arrangement gives Marin the right to purchase the building and land for $13,750,000 at the end of the lease. Based on an economic analysis of the lease at the commencement date, Marin is reasonably certain that the fair value of the leased assets at the end of lease term will be much higher than $13,750,000.What are the total lease payments in this lease arrangement?
Samson Company leases a building and land. The lease term is 6 years and the annual fixed payments are $800,000. The lease arrangement gives Samson the right to purchase the building and land for $11,000,000 at the end of the lease. Based on an economic analysis of the lease at the commencement date, Samson is reasonably certain that the fair value of the leased assets at the end of lease term will be much higher than $11,000,000. What are the total lease payments in this lease arrangement?