Lalonde Ltd., a public company following IFRS, recently signed a lease for equipment from Costner Ltd. The lease term is five years and requires equal rental payments of $25,173 at the beginning of each year. The equipment has a fair value at the lease’s inception of $112,400, an estimated useful life of five years, and no residual value. Lalonde pays all executory costs directly to third parties. The appropriate interest rate is 6%. Prepare Lalonde’s journal entries at the inception of the lease.
Answer to relevant QuestionsUse the information for Lalonde and Costner from BE20–2. Explain, using numbers, how Costner determined the amount of the lease payment of $25,173. In BE Lalonde Ltd., a public company following IFRS, recently signed a ...Use the information for Merrill Corporation from BE20–6. Assume that for Moxey Corporation, the lessor, collectibility is reasonably predictable, there are no important uncertainties concerning costs, and the machinery’s ...Pucci Corporation, a machinery dealer whose stock trades on the Toronto Stock Exchange, and so uses IFRS, leased a machine to Ernst Corporation on January 1, 2011. The lease is for a six-year period and requires equal annual ...Presented below are four independent situations. All the companies involved use private enterprise GAAP. 1. On December 31, 2011, Zarle Inc. sold equipment to Daniell Corp. and immediately leased it back for 10 years. The ...In 2008, Yin Trucking Corporation, which follows private enterprise GAAP, negotiated and closed a long-term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to ...
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