Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $80,000 under a 5-year lease on December 20, 2018. The lease commences on January 1, 2019, and Leewin will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. Leewin made a lease payment of $10,800 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,800, due on January 1 of 2019, 2020, 2021, 2022, and 2023. The implicit rate of the lease is 4% and is known by Leewin. There is no purchase option, no lease incentives, no residual value guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $1,100. Assuming that this is classified as an operating lease, how much amortization is recorded on the right - of -use asset in 2019? O A. SO O B. $11,612 O C. $13,180 O D. $1,568 Leewin Brokerage enters into a lease agreement with Bumble Motors to lease an automobile with a fair value of $80,000 under a 5-year lease on December 20, 2018. The lease commences on January 1, 2019, and Leewin will return the automobile to Bumble on December 31, 2023. The automobile has an estimated useful life of 7 years. Leewin made a lease payment of $10,800 on December 20, 2018. In addition, the lease agreement stipulates annual payments of $10,800, due on January 1 of 2019, 2020, 2021, 2022, and 2023. The implicit rate of the lease is 4% and is known by Leewin. There is no purchase option, no lease incentives, no residual value guarantees, and no transfer of ownership. Leewin incurs initial direct costs of $1,100. Assuming that this is classified as an operating lease, how much amortization is recorded on the right - of -use asset in 2019? O A. SO O B. $11,612 O C. $13,180 O D. $1,568
Expert Answer:
Answer rating: 100% (QA)
Ans 11612 Option 2nd Amortization recorded Annual lease expense Interest expense An... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0134730370
2nd edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
Students also viewed these accounting questions
-
Snappy Corporation enters into a lease agreement with Long Leasing. Long requires that the lease qualify as a sale. Snappy can fill this requirement by either guaranteeing the residual value itself...
-
Jennifer Lewis enters into a lease agreement with Craig Smith LLC to lease a piece of machinery for a four-year term. The lease terms specify annual payments of $2,885,915 at the end of each year...
-
Harcourt Company enters into a lease agreement with Brunsell Inc. to lease office space for a term of 72 months. Lease payments during the first year are $5,000 per month. Each year thereafter, the...
-
Jeffrey Glockzin was an employee of Nordyne, Inc. (Nordyne), which manufactured air conditioning units. Sometimes Glockzin worked as an assembly line tester. The job consisted of using bare metal...
-
Explain the difference between gains and revenues.
-
When finding percentiles, if the locator L is not a whole number, we round it up to the next larger whole number. An alternative to this procedure is to interpolate so that a locator of 23.75 leads...
-
Why does convertible debt carry a lower coupon than straight debt?
-
A firm that produces electric golf carts has just received an order for 200 carts, which must be ready for delivery at the start of week 8. Information concerning the product structure, lead times,...
-
Preparing Common-Size Income Statements by Using Base Period Horizontal Analysis Jasmine Company provided the following income statements for its first 3 years of operation: Year 1 Year 2 Year 3 Net...
-
EYE SPY sells sophisticated video surveillance equipment. EYE SPY sells the equipment and computer integration services together. It does not sell these separately. The equipment cannot operate...
-
1. Post a brief statement regarding the concept of cash bail versus a computer- based risk assessment tool to determine who should be held in custody following arrest and who should be released back...
-
You have 500 shares purchased at $ 87 per share A call with a delta of 0.7 and a strike of 87.50 sells for 0.90 (premium) A put with a delta of 0.50 and a strike of 85 sells fro 0.40 If you are LONG...
-
Evaluate the ethical challenges facing organisations when employing AI systems. Please provide specific examples related to the Australian banking and finance industry and your practical...
-
The cost of a product is 30% of the selling price, and the carrying cost is 12% of the selling price. On the average, accounts are paid 90 days after the sale date. Sales average 30,000 per month....
-
From the book Identity A Reader for Writers -in an AUTOETHNOGRAPHIC RESEARCH on Malcom X identity compose an extended defination of identity in general .Then explain why identity is important and...
-
A classic physics problem states that if a projectile is shot vertically up into the air with an initial velocity of 139 feet per second from an initial height of 136 feet off the ground, then the...
-
Assignment 03: Individual report Due date: Week 13. Friday 13 th October 2023, 5:00pm Weighting: 30% Length and Format : 2000-word Microsoft Word document Assessment Details: Students must describe...
-
F.(3e* -2x 3 sin(2x)) is equal to 2 3 Cos 8. IT 3, t (4+@ 2 3, 1+o 1 4 Cos 4 4 1 3. 1 +4cos V7 (1+o 4 1 4 Cos 4 1+0 4-
-
Insight Corporation leases equipment for 5 years with annual rentals o f $2,000 per year. The agreement also requires that Insight purchase supplies such as oil. fasteners, and filters directly from...
-
Ray's Sporting Goods, Inc., shipped aluminum baseball bats on consignment to Martin Stores on April 6, 2019. The total cost of the bats is $31,000 with a retail value of $50,000. Martin agrees to...
-
Saratoga Company issued bonds with a face value of $200,000 on January 1, 2018, for $202,716. Saratoga uses the fair value option to measure the bonds. At the end of 2018, the carrying value of the...
-
Department A of Racine Company has a gross profit of \($140,000,\) representing 35% of net departmental sales. Management believes that an increase of \($36,000\) in advertising will increase volume...
-
What is the maximum amount that one division should pay to another division of the same company for a component needed in manufacturing its product?
-
The following summary data are from a performance report for Sterling Company for May, during which 9,600 units were produced. The budget reflects the companys normal capacity of 10,000 units. a....
Study smarter with the SolutionInn App