Business, 15.02.2021 20:40 ehsaangaminglegend
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Vance Company, a lessee.
Commencement date January 1, 2020
Annual lease payment due at the beginning of each year, 113,864
beginning with January 1, 2020$
Residual value of equipment at end of lease term, $50,000
guaranteed by the lessee
Expected residual value of equipment at end of lease term $45,000
Lease term 6 years
Economic life of leased equipment 6 years
Fair value of asset at January 1, 2020 $600,000
Lessor's implicit rate 8%
Lessee's incremental borrowing rate 8%
The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased 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 2020 and 2021 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.
c. Suppose Vance received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? What if Vance prepaid rent of $5,000 to Faldo?
Answers: 1
Another question on Business
Business, 21.06.2019 21:10
Of the roles commonly found in the development, maintenance, and compliance efforts related to a policy and standards library, which of the following has the responsibilities of directing policies and procedures designed to protect information resources, identifying vulnerabilities, and developing a security awareness program?
Answers: 3
Business, 22.06.2019 17:40
Within the relevant range, if there is a change in the level of the cost driver, then a. total fixed costs will remain the same and total variable costs will change b. total fixed costs will change and total variable costs will remain the same c. total fixed costs and total variable costs will change d. total fixed costs and total variable costs will remain the same
Answers: 3
Business, 22.06.2019 19:30
He moto hotel opened for business on may 1, 2017. here is its trial balance before adjustment on may 31. moto hotel trial balance may 31, 2017 debit credit cash $ 2,283 supplies 2,600 prepaid insurance 1,800 land 14,783 buildings 72,400 equipment 16,800 accounts payable $ 4,483 unearned rent revenue 3,300 mortgage payable 38,400 common stock 59,783 rent revenue 9,000 salaries and wages expense 3,000 utilities expense 800 advertising expense 500 $114,966 $114,966 other data: 1. insurance expires at the rate of $360 per month. 2. a count of supplies shows $1,050 of unused supplies on may 31. 3. (a) annual depreciation is $2,760 on the building. (b) annual depreciation is $2,160 on equipment. 4. the mortgage interest rate is 5%. (the mortgage was taken out on may 1.) 5. unearned rent of $2,580 has been earned. 6. salaries of $810 are accrued and unpaid at may 31
Answers: 2
Business, 22.06.2019 20:30
Identify the level of the literature hierarchy for u.s. gaap to which each item belongs
Answers: 1
You know the right answer?
The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Va...
Questions
Mathematics, 10.12.2020 04:30
Mathematics, 10.12.2020 04:30
Mathematics, 10.12.2020 04:30
Biology, 10.12.2020 04:30
Chemistry, 10.12.2020 04:30
Chemistry, 10.12.2020 04:30
History, 10.12.2020 04:30
History, 10.12.2020 04:30
Mathematics, 10.12.2020 04:40
Advanced Placement (AP), 10.12.2020 04:40
Biology, 10.12.2020 04:40
