Reference no: EM132721408
Question - On July 1st, 20X1, the Youngsun Kim Corporation leased equipment to the Huaqiang Huang Corporation. Both the Youngsun Kim and Huaqiang Huang Corporation uses ASPE. The following information pertains to this lease transaction.
1. The term of the lease is for six years, with no renewal option. The equipment reverts to the lessor at the termination of the lease, at which time it is expected to have a residual value (not guaranteed) of $18,000.
2. The Corporation amortizes all its equipment on a straight-line basis.
3. The equipment has an economic life of seven years.
4. Collectibility of the lease payments is reasonably predictable and there are no important uncertainties about any unreimbursable costs that have not yet been incurred by the lessor.
5. Equipment rental payments are due on June 30th, of each year, except for the first down payment which is due on July 1st, 20X1.
6. The Corporation sets the annual rental payment to ensure a 9.0% rate of return. Huaqiang Huang Corporation's incremental borrowing rate is 10.0% and the lessor's implicit rate is unknown to the lessee.
7. The equipment's fair market value as at July 1st, 20X1 is $432,000 and its cost to the Youngsun Kim is $333,000.
8. Both corporations use reversing entries.
9. The year end for Huaqiang Huang Corporation is December 31st.
10. The year end for Youngsun Kim Corporation is June 30th.
Required -
1. What type of lease is this for Youngsun Kim Corporation?
2. What type of lease is this for the Huaqiang Huang Corporation?
3. Calculate the annual lease payment
4. Prepare the required Journal entries for 20X1 and 20X2 for the Youngsun Kim Corporation
5. Prepare the required Journal entries for 20X1 and 20X2 for the Huaqiang Huang Corporation.
|
Compare patterns of productivity across latitudes
: Compare and contrast patterns of productivity across latitudes for terrestrial, aquatic and marine systems, and discuss the factors that drive these patterns ov
|
|
Describe the central auditory pathway
: Describe the central auditory pathway from the eighth cranial nerve to the auditory cortex.
|
|
Find how much profit make at present level of operation
: A company has fixed costs of $300,000 and produces one product with a selling price of $72.00. How much profit will make at the present level of operation
|
|
Functional features of the mammal inner ear
: Describe the major structural and functional features of the mammal inner ear. Include the main structures and mechanism of the mechanoelectrical transduction.
|
|
What type of lease is this for Youngsun Kim Corporation
: The equipment's fair market value as at July 1st, 20X1 is $432,000 and its cost to the Youngsun Kim is $333,000. What type of lease is this for Youngsun Kim
|
|
Analyze definition-types and national extent of street gangs
: Analyze the definition, types, and national extent of street gangs. Provide your opinion on whether or not the law enforcement strategies being employed
|
|
Describe the corticospinal tract-corticobulbar tract
: Describe the similarities and differences in the two major descending motor pathways -- the lateral pathways and the ventromedial pathways. For lateral pathways
|
|
Find what amount of direct material was included
: There was only one job left in work in process at the end of May which contained P6, 300 of overhead. What amount of direct material was included?
|
|
What cells are the output neurons of the cerebellum
: Describe the major structural and functional features of the cerebellum in the control of movement. Your answer should include the major cell types, circuits
|