Prepare a table summarizing the lease receipts

Assignment Help Accounting Basics

Reference no: EM131969223

Problem

Ravis Rent-A-Car Company leases a car to Ira Reem, an employee, on January 1, 2016. The term of the noncancelable lease is 4 years. The following information about the lease is provided:

1. Title to the car passes to Ira on the termination of the lease with no additional payment required by the lessee.
2. The cost and fair value of the car to Ravis Rent-A-Car is $8,400. The car has an economic life of 5 years.
3. The lease payments are determined at an amount that will yield Ravis Rent-A-Car a rate of return of 10% on its net investment.
4. Collectibility of the lease payments is reasonably assured.
5. There are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor.
6. Equal annual lease payments are due at the end of each year.

Required: Prepare a table summarizing the lease receipts and interest revenue earned by the Ravis Rent-A-Car for the 4-year lease term.

Prepare the journal entries for 2016 and 2017 to record the lease agreement, the lease receipts, and the recognition of income on the books of Ravis Rent-A-Car.

Reference no: EM131969223

Questions Cloud

What is company organizational structure : Assume you are a project manager in your organization. What is your company's organizational structure?

Describe how the project manager can eliminate problems : Describe how the project manager can eliminate problems during the integration.

Identify three processes that waren sports can implement : Identify three processes and/or technologies that Waren Sports can implement to improve efficiencies in the payroll functions.

What decisions should she make regarding these projects : What decisions should she make regarding these projects if she assigns them a mandatory discount rate of 8.5 percent? Explain why

Prepare a table summarizing the lease receipts : Prepare a table summarizing the lease receipts and interest revenue earned by the Ravis Rent-A-Car for the 4-year lease term.

Give five example of project found in our society : 1: Give five example of project found in our society 2: Describe some situation which project management would probably not be effective.

What is rays recognized gain on the given transaction : What is Ray's RECOGNIZED gain on this transaction? What is Ray's BASIS in the NEW property he received in the exchange?

How much will she have in her plan at retirement : Lena is 40 and plans to work to age 65. If she contributes $200 per month, how much will she have in her plan at retirement?

Effectiveness and efficiency of the project team : Which of the techniques below would not likely improve the ?effectiveness and efficiency of the project team

User Account

All Pages