Superbyte Corporation sells photographic equipment. Superbyte leases equipment to Laguna Madre Company on January 1 of...

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Superbyte Corporation sells photographic equipment. Superbyte leases equipment to Laguna Madre Company on January 1 of the current year. The cost to manufacture the equipment was $12,000,000. The lease agreement between SuperByte and Laguna Madre had the follow terms: 1. The lease is noncancellable. 2. The lease has no residual value or bargain purchase option. 3. The lease term is 8 years; payments are made semiannually. 4. Depreciation is recorded each December 31 using the straight-line approach. 5. The economic life of the equipment is 8 years. 6. The lessee's incremental borrowing rate and the implicit interest rate are both 12% annually. 7. The lease payments are $1,493,617 semiannually. The first payment is due at the inception of the lease; subsequent payments are made every July 1 and January 1. 8. The fair value of the equipment at the inception of the lease is $16,000,000. Refer to Superbyte Corporation. Record the journal entries that SuperByte will make at the inception of the lease and on July 1. Superbyte Corporation sells photographic equipment. Superbyte leases equipment to Laguna Madre Company on January 1 of the current year. The cost to manufacture the equipment was $12,000,000. The lease agreement between SuperByte and Laguna Madre had the follow terms: 1. The lease is noncancellable. 2. The lease has no residual value or bargain purchase option. 3. The lease term is 8 years; payments are made semiannually. 4. Depreciation is recorded each December 31 using the straight-line approach. 5. The economic life of the equipment is 8 years. 6. The lessee's incremental borrowing rate and the implicit interest rate are both 12% annually. 7. The lease payments are $1,493,617 semiannually. The first payment is due at the inception of the lease; subsequent payments are made every July 1 and January 1. 8. The fair value of the equipment at the inception of the lease is $16,000,000. Refer to Superbyte Corporation. Record the journal entries that SuperByte will make at the inception of the lease and on July 1.

Answer rating: 100% (QA)

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