Cheyenne Corporation entered into a lease agreement on January 1, 2020, to provide Oriole Company with...

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Cheyenne Corporation entered into a lease agreement on January 1, 2020, to provide Oriole Company with a piece of machinery. The terms of the lease agreement were as follows. 1. 2. 3. 5. 6. 7. The lease is to be for 3 years with rental payments of $9,563 to be made at the beginning of each year. The machinery has a fair value of $59,200, a book value of $49,200, an end-of-life salvage value of $0, and an economic life of 8 years. At the end of the lease term, both parties expect the machinery to have a residual value of $40,700, none of which is guaranteed. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not of a specialized nature. The implicit rate is 6%, which is known by Oriole. Collectibility of the payments is probable. Assume that the lessor uses straight-line depreciation. Prepare the amortization schedules Oriole will use over the lease term. $ Annual Payment +A $ ORIOLECOMPANY Lease Amortization Schedule Annuity-Due Basis Interest on Liability Reduction of Lease Liability ORIOLECOMPANY Lease Expense Schedule $ (C) Lease Liability tion of te /20 /20 /21 /22 (A) Straight-Line Expense eTextbook and Media List of Accounts LA ORIOLECOMPANY Lease Expense Schedule (B) Interest on Lease Liability (C) Amortization of Right-of-Use Asset (and Liability) (A-B) Carrying Right-of- ENG Cheyenne Corporation entered into a lease agreement on January 1, 2020, to provide Oriole Company with a piece of machinery. The terms of the lease agreement were as follows. 1. 2. 3. 5. 6. 7. The lease is to be for 3 years with rental payments of $9,563 to be made at the beginning of each year. The machinery has a fair value of $59,200, a book value of $49,200, an end-of-life salvage value of $0, and an economic life of 8 years. At the end of the lease term, both parties expect the machinery to have a residual value of $40,700, none of which is guaranteed. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not of a specialized nature. The implicit rate is 6%, which is known by Oriole. Collectibility of the payments is probable. Assume that the lessor uses straight-line depreciation. Prepare the amortization schedules Oriole will use over the lease term. $ Annual Payment +A $ ORIOLECOMPANY Lease Amortization Schedule Annuity-Due Basis Interest on Liability Reduction of Lease Liability ORIOLECOMPANY Lease Expense Schedule $ (C) Lease Liability tion of te /20 /20 /21 /22 (A) Straight-Line Expense eTextbook and Media List of Accounts LA ORIOLECOMPANY Lease Expense Schedule (B) Interest on Lease Liability (C) Amortization of Right-of-Use Asset (and Liability) (A-B) Carrying Right-of- ENG

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A lease will be considered as Financial lease if following conditions are satisfie... View the full answer