User Account

All Pages

Prepare a lease liability amortization table

Assignment Help Accounting Basics
Reference no: EM133005741

Question - On 31 December 20X0, Columbia Inc. entered into an agreement with Scotia Ltd. to lease equipment with a useful life of 6 years. Columbia Inc. will make four equal payments of $112,000 at the beginning of each lease year. Columbia Inc. anticipates that the equipment will have a residual value of $91,200 at the end of the lease, net of removal costs. Columbia Inc. has the option of extending the lease by (1) paying $91,200 to retain the equipment or (2) allowing Scotia Ltd. to remove it.

Scotia Ltd.'s implicit interest rate in this lease is 6%. Columbia Inc.'s incremental borrowing rate is 7%. Columbia Inc. depreciates the leased equipment on a straight-line basis. The lease commences on 1 January 20X1. Assume that the fair value of the equipment on the open market is greater than the present value of the lease payments.

Required -

1. Prepare a lease liability amortization table for this lease for Columbia Inc.

2. Prepare all entries that Columbia Inc. will record for this lease for 20X1 and 20X2.

Reference no: EM133005741

Questions Cloud

How much was the final payment to the bank : On May 1, 2020, Janine Company secured a loan from NorthSouth Bank, P1,250,000 with 1% monthly interest. How much was the final payment to the bank
How long can the professorship be funded : How long can the professorship be funded, at $65,000 per year, beginning in one year, if it earns 5% per year compounded annually
Calculate the break event point in pt days : Variable costs per pt day are expected to be $4900. Calculate the break event point in pt days under this contract
What information are you looking for to understand client : What information are you looking for to understand the client? Be specific. What issues would the auditor be interested in researching further for this business
Prepare a lease liability amortization table : Scotia Ltd.'s implicit interest rate in this lease is 6%. Columbia Inc.'s incremental borrowing rate is 7%. Prepare a lease liability amortization table
What is the net present value analysis of Knack project : What is the net present value analysis of Knack's project, recommend whether Knack should accept or reject the project
What was the variable overhead spending variance : What was (a) the variable overhead spending variance for the year, and (b) the variable overhead efficiency variance for the year
How much additional financing leonard industries require : A minimum cash balance of $ 50,000 is desired. How much additional financing will Leonard Industries require in 2013, if any
Describe the goal of financial management : Describe the goal of financial management and give an example of a management compensation program which is designed to encourage managers

Reviews

Write a Review

Accounting Basics Questions & Answers

  What future cash inflows will precor receive

On January 1, 2016, the Precor Corporation purchased $430,000 par value 6 % bonds. What future cash inflows will Precor receive

  Activity-based costing system

Activity-Based Costing System

  How did the proportion of total liabilities change

How did the proportion of total liabilities change relative to the proportion of shareholders' equity? What does this imply about changes in Wal-mart's leverage

  Discuss necessity of having completely accurate statements

Comment on whether this is true. Discuss the necessity of having completely accurate statements.

  Prepare a common-sized income statement

Prepare a common-sized income statement. To do this, express each income statement amount as a percent of sales. Comment on any differences observed.

  Discuss how webber company is preparing its cash budget

Webber Company is preparing its cash budget for the upcoming quarter. The budgeted beginning cash balance is expected to be $30,000

  What will be the depreciation expense for the years

Assuming that the company's accounting year ends on December 31 of each year, what will be the Depreciation Expense for the years 2014 and 2015

  Using the net present value method prepare an analysis to

the cal-fruit company specializes in decorative fruit baskets. currently the company is analyzing purchase alternatives

  Find the amount of revenue to be recognized

The fair value of the equipment on the date of sale was $100,000. Find the amount of revenue to be recognized on this transaction in 2021

  What is the main accounting policy issue

What is the main accounting policy issue(s) that need to be resolved in relation to the alleged underpayment of wages? (Approximately 15 - 50 words)

  What is the amount of impairment loss under us gaapshow all

fixed asset records of palmettos ltd. and of dec. 31 2013carrying value euro105000 selling

  Juras inc and hinson inc have the following operating

juras inc. and hinson inc. have the following operating datajuras hinsonsales

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd