Sandhill Corp. is a manufacturer of truck trailers. On January 1, 2021, Sandhill Corp. leases 9...
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Sandhill Corp. is a manufacturer of truck trailers. On January 1, 2021, Sandhill Corp. leases 9 trailers to Blue Company under a 5- year noncancelable lease agreement. The following information about the lease and the trailers is provided: 1. Equal annual payments that are due on January 1 each year provide Sandhill Corp. with an 11% return on net investment. 2. Titles to the trailers pass to Blue at the end of the lease. The fair value of each trailer is $51,600. The cost of each trailer to Sandhill Corp. is $46,500. Each trailer has an expected 3. useful life of nine years. 4. Collectibility of the lease payments is probable. Click here to view factor tables. What type of lease is this for the lessor? Calculate the annual lease payment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 5,275.) Annual lease payment $ Prepare a lease amortization schedule for Sandhill Corp. for the first three years. (Round answers to 0 decimal places e.g. 5,275.) Sandhill Corp. Lease Amortization Schedule (Lessor) Interest on Lease Lease Lease Date Annual Lease Rental Receivable Receivable Recovery Receivat 1/1/21 $ 1/1/21 2$ 2$ 1/1/22 1/1/23 Prepare the journal entries for the lessor for 2021 to record the lease agreement, the receipt of the lease rentals, and the recognition of revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit (To record the lease) (To record receipt of the first lease payments) Sandhill Corp. is a manufacturer of truck trailers. On January 1, 2021, Sandhill Corp. leases 9 trailers to Blue Company under a 5- year noncancelable lease agreement. The following information about the lease and the trailers is provided: 1. Equal annual payments that are due on January 1 each year provide Sandhill Corp. with an 11% return on net investment. 2. Titles to the trailers pass to Blue at the end of the lease. The fair value of each trailer is $51,600. The cost of each trailer to Sandhill Corp. is $46,500. Each trailer has an expected 3. useful life of nine years. 4. Collectibility of the lease payments is probable. Click here to view factor tables. What type of lease is this for the lessor? Calculate the annual lease payment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 5,275.) Annual lease payment $ Prepare a lease amortization schedule for Sandhill Corp. for the first three years. (Round answers to 0 decimal places e.g. 5,275.) Sandhill Corp. Lease Amortization Schedule (Lessor) Interest on Lease Lease Lease Date Annual Lease Rental Receivable Receivable Recovery Receivat 1/1/21 $ 1/1/21 2$ 2$ 1/1/22 1/1/23 Prepare the journal entries for the lessor for 2021 to record the lease agreement, the receipt of the lease rentals, and the recognition of revenue. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit (To record the lease) (To record receipt of the first lease payments)
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Sandhill Company What type of lease is this for the lessor Lessor Sandhill Company needs to classify the lease as either finance lease The lease is a ... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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