On January 1, 2017, Vaughn Corp. signs a 5-year noncancelable lease agreement to lease a backhoe...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2017, Vaughn Corp. signs a 5-year noncancelable lease agreement to lease a backhoe from Scherzer Equipment, Inc. The following information pertains to this lease agreement. The agreement requires equal rental payments of $3,370 beginning on January 1, 2017. The fair value of the backhoe on January 1, 2017, is $12,700. The backhoe has an estimated economic life of 6 years, with an unguaranteed residual value of $1,650. Vaughn depreciates similar equipment on the straight-line method. The lease is nonrenewable. At the termination of the lease, the backhoe reverts to the lessor. Vaughn's incremental borrowing rate is 11% per year. The lessor's implicit rate is not known by Vaughn. The yearly rental payment includes $420 of executory costs related to insurance on the back hoe. Date Jan, 1, 2017 Dec. 31, 2017 Account Titles and Explanation (To record the lease) (To record rental payment) (To record amortization) (To record interest) Debit DO TO ON Credit 0000001 Dec. 31, 2018 (To record amortization) (To record interest) On January 1, 2017, Vaughn Corp. signs a 5-year noncancelable lease agreement to lease a backhoe from Scherzer Equipment, Inc. The following information pertains to this lease agreement. The agreement requires equal rental payments of $3,370 beginning on January 1, 2017. The fair value of the backhoe on January 1, 2017, is $12,700. The backhoe has an estimated economic life of 6 years, with an unguaranteed residual value of $1,650. Vaughn depreciates similar equipment on the straight-line method. The lease is nonrenewable. At the termination of the lease, the backhoe reverts to the lessor. Vaughn's incremental borrowing rate is 11% per year. The lessor's implicit rate is not known by Vaughn. The yearly rental payment includes $420 of executory costs related to insurance on the back hoe. Date Jan, 1, 2017 Dec. 31, 2017 Account Titles and Explanation (To record the lease) (To record rental payment) (To record amortization) (To record interest) Debit DO TO ON Credit 0000001 Dec. 31, 2018 (To record amortization) (To record interest)
Expert Answer:
Related Book For
Intermediate Accounting
ISBN: 978-1118742976
16th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
The following information pertains to Family Video Company. 1. Cash balance per bank, July 31, $7,263. 2. July bank service charge not recorded by the depositor $28. 3. Cash balance per books, July...
-
The following information pertains to Ghose Company. 1. Cash balance per bank, July 31, $7,328. 2. July bank service charge not recorded by the depositor $38. 3. Cash balance per books, July 31,...
-
The following information pertains to Teresina Video Company. 1. Cash balance per bank, July 31, R$7,263. 2. July bank service charge not recorded by the depositor R$28. 3. Cash balance per books,...
-
Construct a cumulative relative frequency histogram. Use the following information to answer question. Suppose a class of high school seniors had the following distribution of SAT scores in English....
-
You are a CPA working for a local firm and have been assigned the 2011 tax return of Bobby Crosser. In going over the data that Bobby gave the firm, you are surprised to see that he has reported no...
-
Who is a contributor? Discuss his liability.
-
Jonathan owns Bright Sky Financial Services, Inc. (Bright Sky). He holds a controlling interest in the company. Jonathan manages seven mutual funds for approximately 150 high-wealth clients. Jonathan...
-
The overhead costs that Sife Industries, Inc., used to compute its overhead rate for the past year are as follows. Indirect materials and supplies, repair and maintenance, outside service contracts,...
-
1. 20 The full symbols of atoms of elements R, T, X, Y and Z are 2R, 31, 30, 34X, and 5Z respectively 15 15 164, Which one of the following is an isotope of Y A. R B. T C. X D. Z 2. The electronic...
-
George and Harry Haygood are building contractors who specialize in the construction of private home dwellings, storage warehouses, and small businesses (less than 20,000 sq. ft. of floor space)....
-
Given f(x) = cosh(x) = a+e find exte 2 df (4) dx
-
Under what circumstances will organizational politics be functional or dysfunctional?
-
Why are there so few women in senior leadership positions in organizations? What can organizations do to increase the number of women who occupy senior leadership positions?
-
What is the trait theory of leadership? What are the main weaknesses of the approach?
-
Discuss some of the contemporary concerns of management and the role of organizational behaviour in the successful management of these concerns.
-
What is the need for power?
-
Your state's highway maintenance department is considering whether to buy an asset that delivers an annual benefit of $4.5 million each year it is in use, but the department does not know how long...
-
The baseball player A hits the ball from a height of 3.36 ft with an initial velocity of 34.8 ft/s. 0.14 seconds after the ball is hit, player B who is standing 15 ft away from home plate begins to...
-
On June 30, 2017, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%. Auer uses the effective-interest method to amortize bond premium or discount....
-
Refer to the revenue arrangement in E18-10. Repeat the requirements, assuming (a) Geraths estimates the standalone selling price of the installation based on an estimated cost of $400 plus a margin...
-
Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2013-2019. Pretax financial income (loss) and taxable income (loss) were the same for all years since...
-
Which mechanism of bacterial genetic transfer does not require recombination with the bacterial chromosome?
-
Explain why small deletions and duplications are less likely than large ones to have a detrimental effect on an individuals phenotype. If a small deletion within a single chromosome happens to have a...
-
Explain why inversions and reciprocal translocations do not usually cause a phenotypic effect. Then explain how they can do so in certain cases.
Study smarter with the SolutionInn App