User Account

All Pages

Prepare an amortization schedule that would be suitable

Assignment Help Accounting Basics
Reference no: EM131780249

Problem: Lessee Entries with Residual Value

The following facts pertain to a noncancelable lease agreement between Peanut Butter Stars and Peppermint Brittle, a lessee.

Inception date: January 1, 2012

Annual lease payment due at the beginning of each year,

Beginning with January 1, 2012 $124,798

Residual value of equipment at end of lease term,

guaranteed by the lessee $50,000

Lease term 6 years

Economic life of leased equipment 6 years

Fair Value of asset at January 1, 2012 $600,000

Lessor's implicit rate 12%

Lessee's incremental borrowing rate 12%

The lessee assumes responsibility for all executory costs, which are expected to amount to $5,000 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $50,000. The lessee uses the straight-line depreciation method for all equipment.

(a) Prepare an amortization schedule that would be suitable for the lessee for the lease term.

(b) Prepare all of the journal entries for the lessee for 2012 and 2013 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31.

Reference no: EM131780249

Questions Cloud

What is wrong with the given picture : What's wrong with this picture? Did Mr. Rogers potentially violate the IIA's Code of Ethics and Standards by making these remarks?
What is the maximum number of moles : A. What is the maximum number of moles of P2O5 that can theoretically be made from 211 g of P4 and excess oxygen?
Forecast the terminal period value using the assumptions : Forecast the terminal period value using the assumptions above and assuming a terminal period growth
How many moles of pcl5 : A. How many moles of PCl5 can be produced from 26.0 g of P4 (and excess Cl2 )?
Prepare an amortization schedule that would be suitable : Prepare an amortization schedule that would be suitable for the lessee for the lease term. Assume the lessee's annual accounting period ends on December 31.
What will be the percentage increase in the amplitude : If the system of Problem is excited by a harmonic force of frequency 4 cps, what will be the percentage increase in the amplitude of forced vibration.
What mass of lithium hydroxide : The phosphoric acid solution is 12.74 mL and has a concentration of 0.283 M. What mass of lithium hydroxide must you add to neutralize the solution?
Discuss the nature of the lease for snickerdoodle the lessor : Discuss the nature of this lease for Snickerdoodle, the lessor. Prepare a lease amortization schedule for Sugar Cookie for the 5-year lease term.
Determine the amplitude and phase : When the weight is displaced and released, the period of vibration is 1.80 s, and the ratio of consecutive amplitudes is 4.2 to 1.0.

Reviews

Write a Review

Accounting Basics Questions & Answers

  On july 23 of the current year dakota mining co pays

on july 23 of the current year dakota mining co. pays 4836000 for land estimated to contain 7800000 tons of recoverable

  A machine shop that uses job order costing overhead

a machine shop that uses job order costing. overhead isapplied to individual jobs ata predetermined rate based on

  Assume that canes customers would buy a maximum of 81000

cane company manufactures two products called alpha and beta that sell for 125 and 85 respectively. each product uses

  Examine the motivation of management to manipulate

Identify at least three (3) ratios that could be manipulated to mislead investors and creditors regarding the company's financial condition. Examine the motivation of management to manipulate the ratios identified.

  The annual depreciation worked out

On January 1, 20X1, Robust Inc. purchased heavy-duty equipment for $400,000. On the date of installation, it was estimated that the machine has a useful life of 10 years and a residual value of $40,000.

  What are the two most common types of pension plans

what are the two most common types of pension plans? how do they work? what are the advantages and disadvantages? the pros and corns of each type and pros and corns from employee perspective if any.

  Discuss the entitys bank loan increases or decreases

entities is the owner's basis increased by the owner's share of profits and decreased by the owner's share of losses

  Result of the current distribution

The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Carlos's basis in the building is:

  Mason corporation began the year with cash of 35000 and a

mason corporation began the year with cash of 35000 and a computer that cost 62000. during the year mason earned sales

  Prepare a payroll register for the weekly payroll

Journalize the deposit in a Federal Reserve bank on February 28, 2010, of the FICA and federal income taxes payable to thegovernment.

  Prepare answer sheet assuming ti manufactureson average

ti co a manufacturer of stero started its production as retailer in oct 08 for 3 years then decided to turn it to stero

  Journalize the entries to record the february transactions

Question - Jounralize the response. Journalize the entries to record the February 23, October 6, and November 4 transactions

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