User Account

All Pages

Prepare all the journal entries for sally

Assignment Help Accounting Basics
Reference no: EM131829553

Problem - Carl Leasing, Inc. agrees to lease medical equipment to Sally, Inc. on January 1, 2012. They agree on the following terms.

1) The normal selling price of the medical equipment is $410,000 and the cost of the asset to Carl Leasing, Inc. was $255,000.

2) Sally, Inc. will pay all maintenance, insurance, and tax costs directly and annual payments of $55,000 on January 1 each year.

3) The lease begins on January 1, 2012 and payments will be in equal annual installments.

4) The lease is noncancelable with no renewal option. The lease term is 10 years (the same as the estimated economic life).

5) At the end of the lease, the medical equipment will revert to Carl Leasing, Inc. and have an unguaranteed residual value of $35,000. Their implicit interest rate is 10%.

6) Carl Leasing, Inc. incurred costs of $4,600 in negotiating and closing the lease. There are no uncertainties regarding additional costs yet to be incurred and the collectability of the lease payments is reasonably predictable.

Required:

a) Determine what type of lease this would be for the lessee and calculate the initial obligation.

b) Prepare Sally, Inc.'s amortization schedule for the lease terms.

c) Prepare all the journal entries for Sally, Inc. for 2012. Assume a calendar year fiscal year.

Reference no: EM131829553

Questions Cloud

Indifferent to two forms of payment : You have a loan outstanding. what final payment will the bank require you to make so that it is indifferent to the two forms of payment?
What does the field of cognitive psychology study : What does the field of cognitive psychology study? What is the process of attention? What is the purpose of attention in cognition?
Why is the reliability of airfreight transportation : Discuss the speed of airfreight transportation in terms of its line-haul and accessorial service.
Supermarket chain and convenience store chain : What is the implied uncertainty faced by discount retailer, supermarket chain and convenience store chain?
Prepare all the journal entries for sally : The lease begins on January 1, 2012 and payments will be in equal annual installments. Prepare all the journal entries for Sally, Inc. for 2012
Write a classmate response on given posts : Whistle blowing is when someone tell when they see something illegal, or immortal practice. By telling what they saw they hope someone will do something.
Suggest and discuss several unfavorable consequences : Suggest and discuss several unfavorable consequences facing a business firm that consistently engages in unethical practices.
Where would you see role of community-public health nurse : Give reasons why you think that comparing health care system between conties is important approach. Where would you see role of COMMUNITY /public health nurse?
What are the key ideas regarding the various relationships : What are the key ideas regarding the various relationships that are important for colleagues to understand?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Kirby corporation had the following transactions

Lent $30,000 to Dead End Corporation, receiving Dead End's 1-year, 12% note. Classify each of these transactions by type of cash flow activity (operating, investing, or financing).

  Would you vote for councilwoman doubleton

Further, by eliminating this allowance, revenues could be increased immediately, and additional services could be provided without incurring a deficit. Would you vote for Councilwoman Doubleton motion if you were a council member? Why or why not?

  Compute the amount of conversion cost in the ending work

The amount of conversion cost in the ending work in process inventory was (Round the Cost Per Equivalent Unit calculation to 2 decimal places)

  Company having ethical executives

How do you know if the company you are investing in has ethical executives? And how do you know that those executives will continue to act in an ethical manner when "times get tough"?

  Calculate the change in current assets

A review of a balance sheet indicated the beginning and ending totals of current assets and current liabilities for a one-year operating period.

  What is the operating cash flow

Comm203: Introductory Corporate Finance - What is the operating cash flow and determine the value of the terminal loss or recapture at the end of year. Discuss the consequences of the loss or recapture.

  Determine the financial implications of accepting the order

ABS Inc, produces air bag systems that it sells to North American automobile manufacturers. Determine the financial implications of accepting the order

  Generally accepted accounting principles gaap and

generally accepted accounting principles gaap and international financial reporting standards ifrs differ significantly

  Journalize the entry to record the amount of cash proceeds

On July 1, 2010, Brower Industries Inc. issued $32,000,000 of 10-year, Journalize the entry to record the amount of cash proceeds from the sale of the bonds

  What is the discount payback period of the cash-flow stream

What is the payback period (PP) of the given cash-flow stream? Interpolate to the nearest 0.1 year. What is the discount payback period, DPP((7%) of the given cash-flow stream

  Affiliated group pay for the current period

Assume that Clarke owns 100 percent of Rogers's voting stock and is filing a consolidated tax return. What income tax amount does this affiliated group pay for the current period?

  Broussard company reported net income

Broussard Company reported net income of $2.9 million in 2014 Depreciation for the year was $504,000; account receivable increased $484,000; and accouts payable increased $284,000. Compute net cash flow from operating activities using the indirect..

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