Lessee entries-capital lease with unguaranteed residual

Reference no: EM13763268

(Lessee Entries; Capital Lease with Unguaranteed Residual Value) On January 1, 2014, Manor Inc. signed a 6-year noncancelable lease for a printing press. The terms of the lease called for Manor to make annual payments of $54,291 at the beginning of each year, starting January 1, 2014. The printing press has an estimated useful life of 6 years and a $10,000 unguaranteed residual value. The printing press reverts back to the lessor at the end of the lease term. Manor uses the straight-line method of depreciation for all of its plant assets. Manor's incremental borrowing rate is 12%, and the Lessor's implicit rate is unknown.

Instructions

(a) What type of lease is this? Explain.

(b) Compute the present value of the minimum lease payments.

Reference no: EM13763268

Questions Cloud

Learn the fundamentals of employment law and their role : Develop a training program to help new managers learn the fundamentals of employment law and their role in implementing the policies and practices that maintain legal compliance in the workplace

Propose two ethical concerns that management : Provide a rationale for your response. Note: In this question, the student focuses at the two challenges and address if and how the challenges may raise any ethical issues within and outside of the agency.

Fossil fuels and alternative energy resource : Select a local or regional alternative energy resource. How might this resource be used to supplement or replace fossil fuels?

Responsibility for network design : Write a 1-2 page paper discussing what professional organizations might you join, and websites might you visit, that would provide insight into a career that includes responsibility for network design?

Lessee entries-capital lease with unguaranteed residual : On January 1, 2014, Manor Inc. signed a 6-year noncancelable lease for a printing press. The terms of the lease called for Manor to make annual payments of $54,291 at the beginning of each year, starting January 1, 2014.

Compare and contrast the application of it : Determine how information systems have allowed police departments that implement tools such as COMPSTAT to respond to crime faster. Apply the strengths, weaknesses, opportunities, and threats analysis (SWOT analysis) on behalf of police department..

Natural resources and energy related problem : Identify the risks and benefits of extracting or using one type of nonrenewable and one type of renewable energy resource from that ecosystem.

Executory costs and unguaranteed residual value : Assume that on January 1, 2014, Yard Waste Corp. signs a 6-year noncancelable lease agreement to lease an industrial-strength mulching machine. The following information pertains to this lease agreement.

Explain the role of leadership in a chaotic : Explain the role of leadership in a chaotic, uncertain, and complex environment. Need at least at 500 words

User Account

All Pages