Lessor Co leased equipment to Lessee Co for a 3-year period. Lessor paid $300,000 for the...
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Lessor Co leased equipment to Lessee Co for a 3-year period. Lessor paid $300,000 for the equipment (its fair value) and immediately leased it on Jan. 1, 2020 (est useful life is 4 years and the estimated residual value at the end of the lease term is $60,000). Lessor used an expected rate of return of 8% (known by Lessee). The lessee agreed to guarantee the estimated residual value of $60,000. The first lease payment is due Jan. 1, 2020, and the accounting periods for both entities end on Dec. 31. At the lease termination date, an independent appraiser provided an estimated residual value of $25,000. The lessee immediately paid the difference of $35,000 ($60,000 guaranteed value residual value less $25,000, the actual residual value). a Compute the lease payments for the lessee and the lease liability to be capitalized by the lessor. b Provide the JE to for the lessor on Jan. 1, 2020 to derecognize the inventory and record the lease receivable. Show all calculations Lessor Co leased equipment to Lessee Co for a 3-year period. Lessor paid $300,000 for the equipment (its fair value) and immediately leased it on Jan. 1, 2020 (est useful life is 4 years and the estimated residual value at the end of the lease term is $60,000). Lessor used an expected rate of return of 8% (known by Lessee). The lessee agreed to guarantee the estimated residual value of $60,000. The first lease payment is due Jan. 1, 2020, and the accounting periods for both entities end on Dec. 31. At the lease termination date, an independent appraiser provided an estimated residual value of $25,000. The lessee immediately paid the difference of $35,000 ($60,000 guaranteed value residual value less $25,000, the actual residual value). a Compute the lease payments for the lessee and the lease liability to be capitalized by the lessor. b Provide the JE to for the lessor on Jan. 1, 2020 to derecognize the inventory and record the lease receivable. Show all calculations
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Answer rating: 100% (QA)
Excel final output without formula IFRS 16IND AS 116 Summary of the Lease Lease term 3 Carrying amount of the leased asset in the books of lessor 3000... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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