A company leases equpiment from b company on january 1 2009

Assignment Help Accounting Basics

Reference no: EM13606616

A Company leases equpiment from B Company on January 1, 2009. The 10 year noncancelable lease agreement requires that rental payments of $10,000 be made at the end of each year starting on December 31, 2009. The equpiment has a guaranteed residual value of $1,000 at the end of its 10 year economic life. The lease contract specifies that the equipment may be purchased for $5 at the end of the lease term (this amount is substaintially lower than the estimated fair market value of the asset on that date). At the inception of the lease, the fair market value of the leased asset is $56,000. The lessee's incremental borrowing rate is 12%, and the lessor's implicit rate is not known.

o Present value factor of $1, 10 periods, 12%: 0.3220
o Present value factor of an ordinary annuity, 10 periods, 12%: 5.6502
o Present value factor of an annuity due, 10 periods, 12%: 6.3283
What should be the value of the leased asset recorded by the lessee on January 1, 2009?

Reference no: EM13606616

Questions Cloud

When it rains water vapor in the air condenses into liquid : when it rains water vapor in the air condenses into liquid water and energy is released.a how much energy is released

On april 2 nancy hansel uses her j c penney company credit : on april 2 nancy hansel uses her j. c. penney company credit card to purchase merchandise from a j.c. penney store for

Te electric field 430cm from a very long charged wire is : the electric field 4.30cm from a very long charged wire is 1900nc toward the wire. what is the charge in nc on a

Germanium forms a substitutional solid solution with : germanium forms a substitutional solid solution with silicon. compute the weight percent of germanium that must be

A company leases equpiment from b company on january 1 2009 : a company leases equpiment from b company on january 1 2009. the 10 year noncancelable lease agreement requires that

Two 20-cm-diameter insulating spheres have a 550cm space : two 2.0-cm-diameter insulating spheres have a 5.50cm space between them. one sphere is charged to 94.0nc the other to

Yang amp min inc is a retailer of contemporary furniture : yang amp min inc. is a retailer of contemporary furniture. you are told that yang amp mins ending inventory is 200000

Determine the ratio of the times for the one-bounce and : when baseball outfielders throw the ball they usually allow it to take one bounce on the theory that the ball arrives

If hixson uses the direct write-off method to account for : 1 if hixson uses the direct write-off method to account for uncollectible accounts journalize the adjusting entry at

User Account

All Pages