User Account

All Pages

Prepare a table summarizing the lease receipts

Assignment Help Accounting Basics
Reference no: EM133188306

Question - Berne Company (lessor) enters into a lease with Fox Company to lease equipment to Fox beginning January 1, 2016. The lease terms, provisions, and related events are as follows:

1. The lease term is 4 years. The lease is noncancelable and requires annual rental payments of $50,000 to be made at the end of each year.

2. The equipment costs $130,000. The equipment has an estimated life of 4 years and an estimated residual value at the end of the lease term of zero.

3. Fox agrees to pay all executory costs.

4. The interest rate implicit in the lease is 12%.

5. The initial direct costs are insignificant and assumed to be zero.

6. The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor.

Required -

1. Determine if the lease is a sales-type or direct financing lease from Berne's point of view (calculate the selling price and assume that this is also the fair value).

2. Prepare a table summarizing the lease receipts and interest revenue earned by the lessor.

3. Prepare journal entries for Berne, the lessor, for the years 2016 and 2017.

Reference no: EM133188306

Questions Cloud

Determine the value in today dollars : Sophie believes she can accumulate an amount of $35 360 in 3 years whilst working a part-time job. Determine the value in today dollars
What proper relevant cost in deciding to accept order : Question - Kumander Daot, a manufacturer of computer peripherals, has excess capacity. What proper relevant cost in deciding to accept order
At what amount should the land be reported : When the balance sheet was prepared, the fair value of the land was $84,000. At what amount should the land be reported on the balance sheet of the company
Describe the role of the financial manager : Question - The Portfolio entry should be a minimum of 250 words and not more than 750 words. Describe the role of the Financial Manager
Prepare a table summarizing the lease receipts : The initial direct costs are insignificant and assumed to be zero. Prepare a table summarizing the lease receipts
Make end-of-month adjustments for june : Use the journal page below, make end-of-month adjustments for June for the following. Leave a space between each transaction
How much will you have at the end of seven years : If you invest $900 in a bank in which it will earn 6.5% compounded semi-annually, how much will you have at the end of 7 years
What is the total variable delivery costs incurred last year : Last year, Solaria Inc. produced 15,000 mechanical pencils. What is the total variable delivery costs incurred last year
How much is direct materials standard cost per square foot : Payroll costs are $4.00 per hour, and benefits are $5 per hour. How much is the direct materials standard cost per square foot

Reviews

Write a Review

Accounting Basics Questions & Answers

  What are products on consignment

If Strider Enterprises purchases its goods on terms 2/10, net 30, should the purchases be recorded gross or net? Why?

  What is the after-tax preferred yield for Selten

Assume that Buggy's tax rate is 0% due to continuing heavy tax losses, and Selten's tax rate is 30%. What is the after-tax preferred yield for Selten

  Do the same thing for the state of west virginia

Explain what you think is an approximate REAL unemployment figure in the United States. Explain why you chose the percentage that you chose.

  How much gain must lee recognized on the transfer

Lee, Brad, and Rick form the LBR Partnership on January 1 of the current year. How much gain must Lee recognized on the transfer

  Calculate the present value of the note receivable

On January 1, 2018, London Inc. sold $932,000 worth of goods to Sarnia Ltd. It was determined that Sarnia Inc. had poor credit and signed a three year.

  Experience shows that 3 percent of the amount levied

Orinoco levies property taxes in the amount of $ 2,000,000. Experience shows that 3 percent of the amount levied will not be collected for various reasons, including appeals of tax assessments.

  On april 1 2010 oneill co purchased machinery for 120000

on april 1 2010 oneill co. purchased machinery for 120000. salvage value was estimated to be 5000. the machinery will

  What should be the balance of the notes payable account

What should be the balance of the Notes Payable account on the books of Leary at December 31, 2016 after adjusting entries are made

  How would treat each of with respect to consolidation

How would treat each of with respect to consolidation - intercompany transaction. Need make a calculation for goodwill, amortization schedule

  Define the terms of sale that will result in the goods

Bonita Company ships merchandise to Myan Corporation on December 30. The merchandise reaches the buyer on January 5.

  What were the firm budgeted collections for june

If sales for April, May, and June were $60,000, $80,000, and $70,000, recpectively, what were the firm's budgeted collections for June

  How much loss would the company recognize

Annual fixed costs are $24,000. If Rambles sells 10 units less than breakeven, how much loss would the company recognize on its income statement

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