The following facts pertain to a non-cancelable lease agreement between Sunland Leasing Company and Sheridan Company,...
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The following facts pertain to a non-cancelable lease agreement between Sunland Leasing Company and Sheridan Company, a lessee. January 1, 2025 Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2025 Lessor's implicit rate Lessee's incremental borrowing rate $122,172 $54,000 $49,000 6 years 6 years $644,000 8 % 8 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Prepare Lease amortization schedule The following facts pertain to a non-cancelable lease agreement between Sunland Leasing Company and Sheridan Company, a lessee. January 1, 2025 Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, 2025 Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, 2025 Lessor's implicit rate Lessee's incremental borrowing rate $122,172 $54,000 $49,000 6 years 6 years $644,000 8 % 8 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Prepare Lease amortization schedule
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To analyze this lease agreement we need to calculate the present value of the minimum lease payments ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
Posted Date:
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