Estimated residual value after 50 months is 1180 the

Reference no: EM13582796

Brecker Company leases an automobile with a fair value of $10,906 from Emporia Motors, Inc., on the following terms:

Noncancelable term of 50 months.

Rental of $250 per month (at end of each month). (The present value at 1% per month is $9,800.)

Estimated residual value after 50 months is $1,180. (The present value at 1% per month is $715.) Brecker Company guarantees the residual value of $1,180.

Estimated economic life of the automobile is 60 months.

Brekcer Company's incremental borrowing rate is 12% a year (1% a month). Emporia's implicit rate is unknown.

(a) What is the nature of this lease to Brecker Company?

(b) What is the present value of the minimum lease payments?

(d) Record the first month's depreciation on Brecker Company's books (assume straight-line).

(e) Record the first month's lease payment.

Reference no: EM13582796

Questions Cloud

Ken sold a rental property for 858000 he received 182000 in : ken sold a rental property for 858000. he received 182000 in the current year and 169000 each year for the next four

The population of a mosquito colony in a certain region : the population of a mosquito colony in a certain region experience unihibited exponential growth. the initial

Compute the budgeted manufacturing costs of the calvin : solving for budgeted manufacturing costs. calvin company expects to sell 10 million cases of paper towels during the

Moran owns a building he bought during year 0 for 230000 he : moran owns a building he bought during year 0 for 230000. he sold the building in year 6. during the time he held the

Estimated residual value after 50 months is 1180 the : brecker company leases an automobile with a fair value of 10906 from emporia motors inc. on the following

Nicole organized a new corporation the corporation began : nicole organized a new corporation. the corporation began business on april 1 of year 1. she made the following

Using these data develop an estimated regression equation : waterskiing and wakeboarding are two popular water-sports. finding a model that best suits your intended needs whether

Describe the structure and function of the forelimbs and : describe the structure and function of the forelimbs and hind limbs of the

Bard manufacturing uses a job order cost accounting system : bard manufacturing uses a job order cost accounting system. during one month bard purchased 198000 of raw materials on

User Account

All Pages