User Account

All Pages

Prepare all required journal entries for the lessee on july

Assignment Help Accounting Basics
Reference no: EM132587680

On July 1st, 20X4, the Yuan Yuan Guo Corporation, a manufacturer and distributor of DVD recorders, entered a lease with Zhiyin Huang Rental Inc. Yuan Yuan Guo agreed to lease 20 DVDs for a period of six years beginning July 1st, 20X4. Other lease terms as follows:

Annual Lease Payments beginning 01/07/X4 .............. $ 2,003

Manufacturing Cost of each DVD ................................ 300

Normal Selling Price of each DVD .............................. 525

Estimated economic (EUL) for the DVD's ................... 9 years

Implicit rate in the lease (not known by Zhiyin Huang) 10.0 %

Estimated Residual Value of each DVD at the end of the lease term (not guaranteed by Zhiyin Huang) ............................... $ 80

  • Zhiyin Huang can borrow at 12.0 percent and agrees to assume full responsibility for all repairs and maintenance of the machines. Zhiyin Huang will return the DVDs to Yuan Yuan Guo. Since Zhiyin Huang is a good credit risk, Yuan Yuan Guo is certain to collect the lease payments and will not incur any additional costs after the date of the lease agreement.

Both Companies follow ASPE

Required:

Question 1. Determine how Yuan Yuan Guo, the lessor, and Zhiyin Huang, the lessee, should classify the lease.

Question 2. prepare all required journal entries for the Lessee on July 1st , 20X4.

Question 3. Prepare the required journal entries for the Lessee on December 31 st , 20X4 (assuming a December 31st Fiscal Year End).

Question 4. Prepare the required journal entries for the Lessee on July 1st , 20X5

Question 5. Prepare the required journal entries for the Lessee on December 31st , 20X5 (assuming a December 31st Fiscal Year End).

Question 6. Assume that when the DVD's are returned to Yuan Yuan Guo at the end of the lease term, the residual value of each DVD is only $70. Prepare the journal entry to record the return of the machines by Zhiyin Huang.

Reference no: EM132587680

Questions Cloud

Market level with the change in raw steel : Compare the change in the quantity of raw steel exchanged at the market level with the change in raw steel produced by a representative firm.
How might padding or the budgetary slack affect sales : Consider the impact of these budgeting decision on the corporation's plans for future financing, production volume and capacity (both short term and long term).
Keds-the traditional maker of white canvas : Keds-the traditional maker of white canvas tennis shoes-was near oblivion in the early 1980s because competitors like Nike, Reebok
What the minimum corporate income tax of rl corporation is : Assuming RL Corporation opted to choose OSD of 40%, the income tax due of RL Corp in 2019 is?The minimum corporate income tax (MCIT) of RL Corporation computed
Prepare all required journal entries for the lessee on july : Prepare all required journal entries for the Lessee on July 1st , 20X4. how Yuan Yuan Guo, the lessor, and Zhiyin Huang, the lessee
What the statement of retained earnings is all about : What the Statement of Retained Earnings is all about and why do need it. What is retained earnings? What is that thing called a dividend? Is it an expense?
What is the opportunity cost of continuing to operate : What is the opportunity cost of continuing to operate the fitness studio within the store?
How should the receipt of the funds from the philanthropist : Society purchased furniture as the donor requested. How should the receipt of the funds from the philanthropist be reported by the Benevolent Society in 20x3?
How the police cars will be reported as assets for : 4 years and have a residual value of 10,000. SL Depreciation is used. On the balance sheet of govt funds, the police cars will be reported as assets for

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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