The following facts pertain to a noncancelable lease agreement between Sandhill Leasing Company and Teal Company,...
The following facts pertain to a noncancelable lease agreement
between Sandhill Leasing Company and Teal Company, a
lessee.
| Inception date: | May 1, 2017 | ||
| Annual lease payment due at the beginning of | |||
| each year, beginning with May 1, 2017 | $19,373.99 | ||
| Bargain-purchase option price at end of lease term | $4,400 | ||
| Lease term | 5 | years | |
| Economic life of leased equipment | 10 | years | |
| Lessor’s cost | $62,000 | ||
| Fair value of asset at May 1, 2017 | $85,000 | ||
| Lessor’s implicit rate | 9 | % | |
| Lessee’s incremental borrowing rate | 9 | % |
The collectibility of the lease payments is reasonably predictable,
and there are no important uncertainties surrounding the costs yet
to be incurred by the lessor. The lessee assumes responsibility for
all executory costs. The expected residual value of the equipment
at the end of 5 (10) years is $12,000 ($0).
Homework Answers
| Teal Company (Lessee) | ||||
| Lease Amortisation Schedule | ||||
| Date | Annual Lease Payment + BPO | Interest on liabilities | Reduction in lease liability | Lease Liability |
| (A) | (B=D×9%) | (C=A-B) | (D) | |
| 5/1/17 | $85,000 | |||
| 5/1/17 | $19,373.99 | - | $19,373.99 | $65,626.01 |
| 5/1/18 | $19,373.99 | $5,906.34 | $13,467.65 | $52,158.36 |
| 5/1/19 | $19,373.99 | $4,694.25 | $14,679.74 | $37,478.62 |
| 5/1/20 | $19,373.99 | $3,373.08 | $16,000.91 | $21,477.71 |
| 5/1/21 | $19,373.99 | $1,932.99 | $17,441.00 | $4,036.71 |
| 4/30/22 | $4,400 | $363.30 | $4,036.70 | - |
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The following facts pertain to a noncancelable lease agreement
between Sandhill Leasing Company and Teal Company,...
The following facts pertain to a noncancelable lease agreement between Swifty Leasing Company and Nash Company,...
The following facts pertain to a noncancelable lease agreement
between Swifty Leasing Company and Nash Company, a lessee.
Inception date:
May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2017
$19,803.59
Bargain-purchase option price at end of lease term
$3,900
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$71,000
Fair value of asset at May 1, 2017
$85,000
Lessor’s implicit rate
10
%
Lessee’s incremental borrowing rate...
The following facts pertain to a noncancelable lease agreement between Sheridan Leasing Company and Skysong Company,...
The following facts pertain to a noncancelable lease agreement
between Sheridan Leasing Company and Skysong Company, a lessee.
Inception date: May 1, 2017
Annual lease payment due at the beginning of each year, beginning
with May 1, 2017 $23,811.51
Bargain-purchase option price at end of lease term $3,900
Lease term 5 years
Economic life of leased equipment 10 years
Lessor’s cost $60,000
Fair value of asset at May 1, 2017 $100,000
Lessor’s implicit rate 11 %
Lessee’s incremental borrowing rate...
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The following facts pertain to a noncancelable lease agreement between Monty Leasing Company and Flounder Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,803.59 Bargain-purchase option price at end of lease term $3,900 Lease term 5 years Economic life of leased equipment 10 years Lessor’s cost $71,000 Fair value of asset at May 1, 2017 $85,000 Lessor’s implicit rate 10 % Lessee’s incremental borrowing rate...
Exercise 21-9 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Swifty...
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The following facts pertain to a noncancelable lease agreement between Monty Leasing Company and Flounder Company, a les...
The following facts pertain to a noncancelable lease agreement between Monty Leasing Company and Flounder Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,803.59 Bargain-purchase option price at end of lease term $3,900 Lease term 5 years Economic life of leased equipment 10 years Lessor’s cost $71,000 Fair value of asset at May 1, 2017 $85,000 Lessor’s implicit rate 10 % Lessee’s incremental borrowing rate...
Exercise 21-9 The following facts pertain to a noncancelable lease agreement between Crane Leasing Company and...
Exercise 21-9 The following facts pertain to a noncancelable lease agreement between Crane Leasing Company and Cheyenne Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,153.46 Bargain-purchase option price at end of lease term $4,300 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $69,000 Fair value of asset at May 1, 2017 $84,000 Lessor's implicit rate 9% Lessee's incremental borrowing...
Exercise 21-8 The following facts pertain to a noncancelable lease agreement between Coronado Leasing Company and...
Exercise 21-8 The following facts pertain to a noncancelable lease agreement between Coronado Leasing Company and Whispering Company, a lessee. May 1, 2017 Inception date: Annual lease payment due at the beginning of each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $21,751.90 $3,700 5 years 10 years $67,000 $93,000...
Question 3 The following facts pertain to a noncancelable lease agreement between Novak Leasing Company and...
Question 3 The following facts pertain to a noncancelable lease agreement between Novak Leasing Company and Splish Company, a lessee. May 1, 2017 Inception date: Annual lease payment due at the beginning of each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $21,737.01 $3,800 5 years 10 years $68,000 $93,000...
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The following facts pertain to a noncancelable lease agreement between Wildhorse Leasing Company and McKee Electronics, a lessee, for a computer system. Commencement date October 1, 2017 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at October 1, 2017 $354,989 Book value of asset at October 1, 2017 $280,000 Residual value at end of lease term –0– Lessor’s implicit rate 9 % Lessee’s incremental borrowing rate 9 % Annual lease payment due at...
The following facts pertain to a noncancelable lease agreement between Pharoah Leasing Company and Novak Company,...
The following facts pertain to a noncancelable lease agreement
between Pharoah Leasing Company and Novak Company, a
lessee.
Inception date:
May 1, 2017
Annual lease payment due at
the beginning of
each year,
beginning with May 1, 2017
$18,727.72
Bargain-purchase option price
at end of lease term
$4,000
Lease term
5
years
Economic life of leased
equipment
10
years
Lessor’s cost
$62,000
Fair value of asset at May 1,
2017
$82,000
Lessor’s implicit rate
9
%
Lessee’s incremental
borrowing rate...
The following facts pertain to a noncancelable lease agreement
between Swifty Leasing Company and Nash Company, a lessee.
Inception date:
May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2017
$19,803.59
Bargain-purchase option price at end of lease term
$3,900
Lease term
5
years
Economic life of leased equipment
10
years
Lessor’s cost
$71,000
Fair value of asset at May 1, 2017
$85,000
Lessor’s implicit rate
10
%
Lessee’s incremental borrowing rate...
The following facts pertain to a noncancelable lease agreement
between Sheridan Leasing Company and Skysong Company, a lessee.
Inception date: May 1, 2017
Annual lease payment due at the beginning of each year, beginning
with May 1, 2017 $23,811.51
Bargain-purchase option price at end of lease term $3,900
Lease term 5 years
Economic life of leased equipment 10 years
Lessor’s cost $60,000
Fair value of asset at May 1, 2017 $100,000
Lessor’s implicit rate 11 %
Lessee’s incremental borrowing rate...
Exercise 21-9 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Swifty Leasing Company and Nash Company, a lessee May 1, 2017 Inception date Annual lease payment due at the beginning of each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease $18,758.38 $3,800 term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate 5 years 10...
Exercise 21-9 The following facts pertain to a noncancelable lease agreement between Crane Leasing Company and Cheyenne Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,153.46 Bargain-purchase option price at end of lease term $4,300 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $69,000 Fair value of asset at May 1, 2017 $84,000 Lessor's implicit rate 9% Lessee's incremental borrowing...
Exercise 21-8 The following facts pertain to a noncancelable lease agreement between Coronado Leasing Company and Whispering Company, a lessee. May 1, 2017 Inception date: Annual lease payment due at the beginning of each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $21,751.90 $3,700 5 years 10 years $67,000 $93,000...
Question 3 The following facts pertain to a noncancelable lease agreement between Novak Leasing Company and Splish Company, a lessee. May 1, 2017 Inception date: Annual lease payment due at the beginning of each year, beginning with May 1, 2017 Bargain-purchase option price at end of lease term Lease term Economic life of leased equipment Lessor's cost Fair value of asset at May 1, 2017 Lessor's implicit rate Lessee's incremental borrowing rate $21,737.01 $3,800 5 years 10 years $68,000 $93,000...
The following facts pertain to a noncancelable lease agreement
between Pharoah Leasing Company and Novak Company, a
lessee.
Inception date:
May 1, 2017
Annual lease payment due at
the beginning of
each year,
beginning with May 1, 2017
$18,727.72
Bargain-purchase option price
at end of lease term
$4,000
Lease term
5
years
Economic life of leased
equipment
10
years
Lessor’s cost
$62,000
Fair value of asset at May 1,
2017
$82,000
Lessor’s implicit rate
9
%
Lessee’s incremental
borrowing rate...
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