The following facts pertain to a non-cancelable lease agreement between Sage Hill Leasing Company and Oriole...
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The following facts pertain to a non-cancelable lease agreement between Sage Hill Leasing Company and Oriole Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor s cost Fair value of asset at May 1, 2020 Lessor s implicit rate Lessee s incremental borrowing rate May 1, 2020 $19,656.69 $7,000 5 years years The collectibility of the lease payments by Sage Hill is probable. 10 $65,000 $93,000 6 % 6 % Compute the amount of the lease receivable at commencement of the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answer to 2 decimal places, e.g. 5,275.15.) Lease receivable at commencement $ Prepare a lease amortization schedule for Sage Hill for the 5-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) SAGE HILL LEASING COMPANY (Lessor) Lease Amortization Schedule Date 5/1/20 5/1/20 5/1/21 5/1/22 5/1/23 5/1/24 4/30/25 $ tA Annual Lease Payment Plus BPO tA tA Interest on Lease Receivable LA $ LA Recovery of Lease Receivable tA Lease Rece Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2020 and 2021. The lessor s accounting period ends on December 31. Reversing entries are not used by Sage Hill. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date (To record the lease) (To record lease payment) Debit Credit (To record lease payment) Suppose the collectibility of the lease payments was not probable for Sage Hill. Prepare all necessary journal entries for the company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15.) Date Account Titles and Explanation 5/1/20 Debit Credit The following facts pertain to a non-cancelable lease agreement between Sage Hill Leasing Company and Oriole Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with May 1, 2020 Bargain purchase option price at end of lease term Lease term Economic life of leased equipment Lessor s cost Fair value of asset at May 1, 2020 Lessor s implicit rate Lessee s incremental borrowing rate May 1, 2020 $19,656.69 $7,000 5 years years The collectibility of the lease payments by Sage Hill is probable. 10 $65,000 $93,000 6 % 6 % Compute the amount of the lease receivable at commencement of the lease. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answer to 2 decimal places, e.g. 5,275.15.) Lease receivable at commencement $ Prepare a lease amortization schedule for Sage Hill for the 5-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) SAGE HILL LEASING COMPANY (Lessor) Lease Amortization Schedule Date 5/1/20 5/1/20 5/1/21 5/1/22 5/1/23 5/1/24 4/30/25 $ tA Annual Lease Payment Plus BPO tA tA Interest on Lease Receivable LA $ LA Recovery of Lease Receivable tA Lease Rece Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2020 and 2021. The lessor s accounting period ends on December 31. Reversing entries are not used by Sage Hill. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date (To record the lease) (To record lease payment) Debit Credit (To record lease payment) Suppose the collectibility of the lease payments was not probable for Sage Hill. Prepare all necessary journal entries for the company in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.15.) Date Account Titles and Explanation 5/1/20 Debit Credit
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Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
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