Reference no: EM132903727
Question - Sarh Pieces Inc. creates aluminum alloy parts for commercial aircraft. In a recent transaction Sarh leased a high precision lathe machine from Pranav Revolving Corp. on January 1, 2019. The following information pertains to the leased asset and the lease agreement:
Cost of lathe to lessor $140,000
Pranav's normal selling price for lathe $178,268
Useful life 7 years
Estimated value at end of useful life $8,000
Lease provisions Lease term 5 years
Payment frequency Annual
Start date of lease January 1
Payment timing December 31
Estimated residual value at end of lease (unguaranteed) $20,000
Interest rate implicit in the lease (readily determinable by lessee) 7%
The lathe machine will revert back to the lessor at end of lease term, title does not transfer to lessee at any time, and there is not a bargain purchase option.
Required -
a. Determine the amount of lease payment that the lessor would require to lease the asset to an outside party.
b. Classify this lease from the perspective of the lessor, Pranav Revolving Corp.
c. Make an amortization schedule for the lessor.
d. Make the journal entries on January 1, 2019 and December 31, 2019 for the lessor.
|
How is balanced with responsible corporate behavior
: Determine what stakeholders are affected when walmart remains profitable. How is this balanced with responsible corporate behavior?
|
|
Construct a cumulative frequency distribution
: A manufacturer of insulation randomly selects 25 winter days and records the daily high temperature as follows: 58,61,63,64,66,67,68,69,70,75, 76,77,77,78,79,81
|
|
How much is your adjusted gross income
: You receive a 1099-INT from your bank that indicated interest earned of $5866. How much is your adjusted gross income
|
|
How could HKD get through the culture minefield
: How could HKD get through the culture minefield to ensure Hong Kong Disneylands success and How well had Disney achieved its goal of translating its strategic
|
|
Determine the amount of lease payment
: Determine the amount of lease payment that the lessor would require to lease the asset to an outside party
|
|
Describe 21 elements of foreign exchange rate policies
: Describe 21 elements of foreign exchange rate policies and provide an examplea each.
|
|
What is life-cycle costing, and why is it used
: What is life-cycle costing, and why is it used? For what types of firms is life cycle costing most appropriate and why
|
|
Is it shared by any particular group of people
: Identify at least one strong attitude you have for or against an event, a person/group, or a thing. How did you acquire this attitude?
|
|
Business-level strategies detail commitments
: Business-level strategies detail commitments and actions taken to provide value to customers and gain competitive advantage by exploiting core competencies in t
|