Riza, Inc. leased an equipment form Joey Company on December 31,2019. The equipment has a fair...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Riza, Inc. leased an equipment form Joey Company on December 31,2019. The equipment has a fair value of P1,011,840 at this date Annual lease payments are P135,000 and are payable each December 31. The first payment was made on December 31, 2019. At the end of the 12 year - lease term, title to the equipment will pass to Riza, Inc. the equipment has an estimated residual value of P40,000 at the end of the 15-year useful life. Problem 4 10 11 12 13 14 15 16 17 18 . 19 . On January 1, 2019 Shirley Corporation leased a machinery form Joel Company on a five -year lease term at P150,000 annual rental payments, paid in advance There is a bargain purchase option on December 31, 2023 of P240,000 The economic life of the equipment is 15 years. The interest rate implicit in this lease, which is known to Shirley is 12%. . . What is the lessor's implicit interest rate in this lease ? Prepare a partial amortization table for the first three years of the lease term. How much depreciation will be taken up by Riza for the year 2019 ? . Prepare the entries in the books of Riza for the year 2019 and 2020. How much of the lease liability on December 31,2019 will be classified as current liabilities and non-current liabilities ? At what amount should the asset be recorded on January 1, 2019 ? Prepare an amortization for the entire term of the lease. How much depreciation will be taken up by Shirley for the year 2019 ? Prepare the entries in the books of Shirley to record the foregoing for the years 2019 and 2020. Assume at the end of the lease term, Shirley exercised its purchase option. Give the entry for the exercise. Give the journal entry at the end of the lease term assuming that Shirley failed o exercise its bargain purchase option. Riza, Inc. leased an equipment form Joey Company on December 31,2019. The equipment has a fair value of P1,011,840 at this date Annual lease payments are P135,000 and are payable each December 31. The first payment was made on December 31, 2019. At the end of the 12 year - lease term, title to the equipment will pass to Riza, Inc. the equipment has an estimated residual value of P40,000 at the end of the 15-year useful life. Problem 4 10 11 12 13 14 15 16 17 18 . 19 . On January 1, 2019 Shirley Corporation leased a machinery form Joel Company on a five -year lease term at P150,000 annual rental payments, paid in advance There is a bargain purchase option on December 31, 2023 of P240,000 The economic life of the equipment is 15 years. The interest rate implicit in this lease, which is known to Shirley is 12%. . . What is the lessor's implicit interest rate in this lease ? Prepare a partial amortization table for the first three years of the lease term. How much depreciation will be taken up by Riza for the year 2019 ? . Prepare the entries in the books of Riza for the year 2019 and 2020. How much of the lease liability on December 31,2019 will be classified as current liabilities and non-current liabilities ? At what amount should the asset be recorded on January 1, 2019 ? Prepare an amortization for the entire term of the lease. How much depreciation will be taken up by Shirley for the year 2019 ? Prepare the entries in the books of Shirley to record the foregoing for the years 2019 and 2020. Assume at the end of the lease term, Shirley exercised its purchase option. Give the entry for the exercise. Give the journal entry at the end of the lease term assuming that Shirley failed o exercise its bargain purchase option.
Expert Answer:
Answer rating: 100% (QA)
The image displays a text that outlines two problems related to lease accounting Each problem details specific information about equipment leases and ... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
Students also viewed these accounting questions
-
The following questions are used in the Kaplan CPA Review Course to study leases while preparing for the CPA examination. Determine the response that best completes the statements or questions. 1. A...
-
Evaluate the indefinite integral. (Use C for the constant of integration.) [ (inx (In x)8 dx X
-
Two trains leave the same station at the same time, but are headed in opposite directions. One train travels at 70 mph, and the other train travels at 80 mph. How much time passes until the trains...
-
Mickey Limited is a manufacturing business that uses a standard costing system. The companys flexed budget for April 20X9 is: Sales 173,340 Costs Direct materials (22,500) Direct labour (37,684)...
-
Explain why it is that the more massive an object is, the casier it becomes to predict its future position.
-
Explain the tests of control that involve (a) terminated employees and (b) witnessing a payroll distribution.
-
The following MINITAB output presents a multiple regression equation y = b0 + b1x1 + b2x2 + b3x3 + b4x4 + b5x5. It is desired to drop one of the explanatory variables. Which of the following is the...
-
Montel Companys July sales budget calls for sales of $600,000. The store expects to begin July with $50,000 of inventory and to end the month with $40,000 of inventory. Gross margin is typically 40%...
-
Points: 0 of 2 Over the past 5 weeks, demand for wine at Winston's Winery has averaged 1,860 bottles, and the variance of demand has been 676,750 bottles. Winston has ordered an average o variance of...
-
Understanding the relationship between business and society and the ways in which business and society are part of an interactive system.
-
E3.10 Find V, in Fig E3.10 using nodal analysis. ANSWER: V= 5.6 V. 2 mA 12V 2 kl) 8 mA 3 kn 6 kn 1 k Vo Figure E3.10 ww
-
Questions: What does "the honour of the Crown" mean and what are its origins? How does it relate to the legal concept of "the duty to consult"? Why do provincial governments now have to demonstrate...
-
In 2023, Sasha and Peter entered into a 1031 like-kind exchange. Sasha exchanged an apartment building in Washington for Peter's apartment building in Oregon. Sasha's apartment building had a fair...
-
A bungee jumper of mass =85.8 kg steps off a platform a height =50.0 m above the ground. The bungee jumper is connected to the platform by a bungee cord with unstretched length =10.0 m and spring...
-
Draft a memo to your boss Sydney setting forth the legal responsibilities (if any) towards this person. Discuss in detail, in relation to both federal and a specific state law, if the company has to...
-
An earthquake occurred in one of the warehouses of Sable Ltd in Melbourne on 15 June 2022 and caused extensive damage worth $50,000. The warehouse and its contents are fully insured. No disclosure...
-
How can I find the net realizable value per unit. I have the units in hand: 1,350,600, cost per unit: 617, cost: 833,320,200 willing to pay: 165, Cost to sell: 165*1,350,600= 222,849,000. Realizable...
-
What impact has the Internet had on the globalization of small firms? How do you think small companies will use the Internet for business in the future?
-
What indicators suggest that a performance obligation has been satisfied with respect to a good (merchandise)?
-
At January 1, 2013, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity), 4% note. The market rate of interest for notes of similar risk is 10%. Required: 1. Prepare...
-
The 2010 annual report of Hewlett-Packard Company reports zero-coupon notes issued at the end of its 1997 fiscal year. One billion, eight hundred million dollars face amount of 20-year debt sold for...
-
Derive the equation of motion of Example 4.16 using Newton's second law of motion. Example 4.16 A Rolling Disk The disk on the inclined plane of Figure 4.15 is supported by two massless springs. It...
-
For the problem of oscillator control, given by Equation 4.32, consider the specific governing equation \[ \ddot{x}+2 \zeta \omega_{n} \dot{x}+\omega_{n}^{2} x=\frac{A}{m} \cos \omega t+F_{\text...
-
For Example 4.16 derive the equation of motion using \(x\) as the generalized coordinate. Then solve this equation with initial conditions \(x_{0}, v_{0}\) to find \[ x(t)=\frac{v_{0}}{\omega} \sin...
Study smarter with the SolutionInn App