Prepare a complete lease amortization table

Assignment Help Accounting Basics

Reference no: EM131765901

Question: For some time, Balster Inc. has maintained a policy of acquiring company equipment by leasing. On December 31, 2005, Balster entered into a lease with Edgemont Fabricators for a new concrete truck that had a selling price of $265,000. The lease stipulates that annual payments of $52,500 will be made for 6 years. The first lease payment is made on December 31, 2005, and subsequent payments are made on December 31, of each year. Balster guarantees a residual value of $45,890 at the end of the 6-year period. The incremental borrowing rate and the implicit interest rate are both 12%. The economic life of the truck is 9 years. Balster uses the calendar year for reporting purposes and straight-line depreciation to depreciate other equipment.

1. Prepare a complete lease amortization table.

2. Give the journal entries that would be made on Balster's books through 12/31/2007.

3. Prepare the journal entry Balster would make at the end of the lease if the market value of the equipment is $29,000.

Reference no: EM131765901

Questions Cloud

Discuss all supplies ordered were received in good condition : All supplies ordered were received in good condition and taken directly to the office, but the invoice was not paid

How much inventory was purchased during the year : Thompson Company updates its inventory records perpetually. The company's records showed a beginning inventory of $15,000; cost of goods sold of $23,000.

Determine the maximum allowable gage pressure : Determine the maximum allowable gage pressure inside the shown tank. The tank wall thickness is 0.375 inches. the allowable normal stress perpendicular

What steps will you take to perform a comprehensive risk : What steps will you take to perform a comprehensive risk assessment for your organization? Who will you need help from in performing this assessment?

Prepare a complete lease amortization table : For some time, Balster Inc. has maintained a policy of acquiring company equipment by leasing. On December 31, 2005, Balster entered into a lease with Edgemont.

Calculate the total indirect manufacturing costs : Required - Calculate the total indirect manufacturing costs for December from the information given above

What do these measurements tell us about the sun : Astronomers find that light emitted by a particular element at one edge of the Sun has a slightly higher frequency than light from that element at the opposite

Evaluate the following question and give a hypothetical : Evaluate the following question and give a hypothetical example that will back up

What rules apply in the third-person voice : Research labor laws and legal cases on union organization in parking lots. Explain in 200 words what Rule(s) (of law) apply in the third-person voice.

User Account

All Pages