Multiple Choice$77,519$140,000$48.481$91,519 Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer tothe lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease isnoncancelable.Payment123CashiPayment10$ 14,00014,00014,000Effective Decrease in OutstandingInterest balance.Balance)$91,51977,51972,04665,971$08,5277,92514,00014,00014,00014,00014,00014,000$ 14,000What is the total effective interest paid over the term of the lease?7,2576,515$ 14,0005,4736,0756,7437,485.5,6924,778$ 3,76378,3089,222$ 10,237?259,22851,74343,43534,213$ 23,9767

A lease is a financial arrangement in which one party grants the right to use the asset to other…

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 2 3 Cash Payment 9 10 $ 14,000. 14,000 14,000 14,000 14,000 14,000 14,000 14,000 Effective Decrease in Outstanding Interest balance Balance: $91,519 77,519 72,046 65,971 $ 14,000 5,473 6,075 6,743 7,485 $0 8,527 7,925 7,257 6,515 5,692 8,308 43,435 4,778 9,222 34,213 $ 3,763 $ 10,237 $ 23,976 7 59,228 51,743 14,000 $ 14,000 What is the total effective interest paid over the term of the lease?

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 2 3 Cash Payment 9 10 $ 14,000. 14,000 14,000 14,000 14,000 14,000 14,000 14,000 Effective Decrease in Outstanding Interest balance Balance: $91,519 77,519 72,046 65,971 $ 14,000 5,473 6,075 6,743 7,485 $0 8,527 7,925 7,257 6,515 5,692 8,308 43,435 4,778 9,222 34,213 $ 3,763 $ 10,237 $ 23,976 7 59,228 51,743 14,000 $ 14,000 What is the total effective interest paid over the term of the 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 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.
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment CashPayment EffectiveInterest Decreasein balance Outstanding Balance 108,703 1 15,000 15,000 93,703 2 15,000 7,496 7,504 86,200 3 15,000 6,896 8,104 78,096 4 15,000 6,248 8,752 69,343 5 15,000 5,547 9,453 59,891 6 15,000 4,791 10,209 49,682 7 15,000 3,975 11,025 38,656 8 15,000 3,093 11,907 26,749 9 15,000 ? ? ? 10 15,000 ? ? ? What amount would the lessee record as annual amortization on the right-of-use asset using the straight-line method? (Round your answer to the nearest dollar.) Multiple Choice $9,370. $15,000.…
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Cash Effective Decrease Outstanding Payment Payment Interest in balance Balance 63,282 1 10,000 10,000 53,282 10,000 6,394 3,606 49,676 3. 10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 6. 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 10,000 2,882 7,118 16,901
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 63,282 1 10,000 10,000 53,282 2 10,000 6,394 3,606 49,676 3 10,000 5,961 4,039 45,637 4 10,000 5,476 4,524 41,113 5 10,000 4,934 5,066 36,047 6 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 8 10,000 2,882 7,118 16,900 9 10,000 ? ? ? 10 10,000 ?…
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 101,385 1 15,000 15,000 86,385 2 15,000 8,639 6,361 80,024 3 15,000 8,002 6,998 73,026 4 15,000 7,303 7,697 65,329 5 15,000 6,533 8,467 56,862 6 15,000 5,686 9,314 47,548 7 15,000 4,755 10,245 37,303 8 15,000 3,730 11,270 26,033 9 15,000 ? ? ? 10 15,000…
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Effective Decrease in Outstanding Balance $ 83,943 balance Payment Cash Payment Interest 1 2 3 4 5 6 7 8 9 10 O Multiple Choice O $ 12,000 12,000 12,000 12,000 12,000 12,000 O 12,000 12,000 12,000 $ 12,000 O 9% What is the effective annual Interest rate? Note: Round final answer to the nearest whole percentage. 6% 11% 6,475 5,978 5,436 4,845 4, 201 7% 3,499 $ 2,734 ? 2 $ 12,000 5,525 6,022 6,564 7,155 7,799 8,501 $ 9,266 ? ? 71,943 66,418 60,396 53,832 46,677 38,878 30,377 $ 21,111 ? ?
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment Cash Payment Effective Interest Decrease in balance Outstanding Balance 83,943 1 12,000 12,000 71,943 2 12,000 6,475 5,525 66,418 3 12,000 5,978 6,022 60,396 4 12,000 5,436 6,564 53,832 5 12,000 4,845 7,155 46,677 6 12,000 4,201 7,799 38,878 7 12,000 3,499 8,501 30,377 8 12,000 2,734 9,266 21,111 9 12,000 ? ? ? 10 12,000 ?…
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Payment 1 2 3 4 5 6 7 8 9 10 O Cash Payment Multiple Choice O $ 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 $ 12,000 O $8,111 $12,000 Effective Decrease in Outstanding Interest balance Balance $81, 108 69,108 64,019 58,421 52,263 45,489 38,038 29,842 $ 20,826 $6,911 $0 6,911 6,402 5,842 5,226 4,549 3,804 $ 2,984 What amount would the lessee record as annual amortization on the right-of- use asset using the straight-line method? Note: Round your answer to the nearest whole dollar. • ? ? $ 12,000 5,089 5,598 6,158 6,774 7,451 8,196 $ 9,016 ? ? ? ?
Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $1,500 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Cash Effective Decrease in Outstanding Payment Payment Interest Balance Balance 40,860 31,960 24,978 17,577 9,731 ?? 0 1 2 3 4 5 6 8,900 8,900 8,900 8,900 8,900 1,500 Multiple Choice $46,000 ?? 1,918 1,499 1,055 What is the total interest paid over the term of the lease? $2.760 ?? 85 ?? 6,982 7,401 7,845 ?? 1,415
Refer to the following lease amortization schedule. The five payments are made annually starting with the beginning of the lease. A $2,300 purchase option is reasonably certain to be exercised at the end of the five-year lease. The asset has an expected economic life of eight years. Lease Payment Cash Payment Effective Interest Decrease in Balance Outstanding Balance 32,350 1 7,000 ?? ?? 25,350 2 7,000 1,775 5,225 20,125 3 7,000 1,409 5,591 14,534 4 7,000 1,017 5,983 8,551 5 7,000 ?? ?? ?? 6 2,300 150 2,150 0 What is the outstanding balance after payment 5? $2,150. $2,300. $2,450. $4,450.
An operating lease has unequal payments over the lease term. During the first year, the payment is $14,000; total payments over the five-year lease term are $120,000. Based on the present value of the total lease payments and the implicit interest rate, interest expense incurred during the first year is $6,000. Amortization of the right-to-use asset for year 1 should be: Multiple Choice $0 $8,000 $20,000 $24,000
Payment The following is a lease amortization schedule for Green Jeans Company (the lessee). The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to Green Jeans and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. 1 2 3 4 5 6 7 8 9 10 Cash Payment 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 Effective Interest 7,487 6,935 6,329 5,662 4,928 4, 121 3,233 ? ? Saved Decrease in balance < Prev 13,000 5,513 6,065 6,671 7,338 8,072 8,879 9,767 ? ? Outstanding Balance 23 of 24 87,867 74,867 69,354 63,289 56,618 49, 280 41,208 32,329 22,562 What is Green Jean's outstanding balance after payment 9? (Round your answer to the nearest whole dollar.) ‒‒‒ ? ? SAMSUNG Help Save & Exit Next ENG