On May 1st 2020 a company signs a lease acquiring the right to use an airplane...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On May 1st 2020 a company signs a lease acquiring the right to use an airplane for three years, and at the end of the lease the company will become the owner of the airplane. The lease is considered a capital lease with an interest rate of 12% and monthly payments. The company agrees to repay the loan in equal monthly installments of $4596.79 over the next 3 years. The first payment is to be made on May 31st 2020. Required 1: What is the amount of the lease recognized in the books as of May 1st 2020? $| Required 2: For the first year, what is the amount of interest expense recognized in the Income Statement of April 30th 2021? $ Required 3: For the first year, what is the amount of the lease reported in the Balance Sheet of April 30th 2021? $ Required 4: For the second year, what is the amount of interest expense recognized in the Income Statement of April 30th 2022? $ Required 5: For the second year, what is the amount of the lease reported in the Balance Sheet of April 30th 2022 $ Required 6: For the third year, what is the amount of lease payments (excluded interest) made between May 1st 2022 and April 30th 2023? $ Required 7: In the last payment on April 30th 2023, what is the amount of the last payment to cancel the loan? $ On May 1st 2020 a company signs a lease acquiring the right to use an airplane for three years, and at the end of the lease the company will become the owner of the airplane. The lease is considered a capital lease with an interest rate of 12% and monthly payments. The company agrees to repay the loan in equal monthly installments of $4596.79 over the next 3 years. The first payment is to be made on May 31st 2020. Required 1: What is the amount of the lease recognized in the books as of May 1st 2020? $| Required 2: For the first year, what is the amount of interest expense recognized in the Income Statement of April 30th 2021? $ Required 3: For the first year, what is the amount of the lease reported in the Balance Sheet of April 30th 2021? $ Required 4: For the second year, what is the amount of interest expense recognized in the Income Statement of April 30th 2022? $ Required 5: For the second year, what is the amount of the lease reported in the Balance Sheet of April 30th 2022 $ Required 6: For the third year, what is the amount of lease payments (excluded interest) made between May 1st 2022 and April 30th 2023? $ Required 7: In the last payment on April 30th 2023, what is the amount of the last payment to cancel the loan? $
Expert Answer:
Answer rating: 100% (QA)
Capital Lease Calculations Required 1 Amount of Lease Recognized To calculate the present value of the lease payments and record the amount of the lea... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
Commercial Bank and Trust Company is studying the use of its automatic teller machines (ATMs). Of particular interest is whether young adults (under 25 years) use the machines more than senior...
-
Refer to Exercise 8.S.6. Compare the habitats using a t test at α = 0.10. Use a non directional alternative. Exercise 8.S.6 Biologists noticed that some stream fishes are most often...
-
You thought that the London property market is severely undervalued due to the recent collapse of the financial market and you believe the property market will rebound soon. Hence, you are...
-
Problem 1 , Refer to Problem I. (a) Find the cumulative distribution function F(x). Be sure to write your answer in the appropriate way. (b) Find the mean value of X, i.e. find E(X). (c) Find the...
-
Refer to E3-10. E3-10 Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account...
-
Do you think a more representative and active board will prevent a similar scenario for United Way in the future? Why or why not? In the past, most boards of directors have tended to be rubber...
-
List and briefly explain the primary characteristics of long-term debt securities. What are the primary distinctions between a debt security and an equity security?
-
You are a public health official trying to determine the identity of the pathogen circulating within your city. Explain which genetic technologies would be most useful in this process.
-
Compute for the amount of overvaluation that was realized from the branch sales.. ABC Company has two merchandise outlets, its main store in Baguio City and its San Fernando City Branch. For control...
-
You are the controller of a firm whose CEO believes that debt should always be used to finance long-term expenditures because interest is tax deductible. List and describe other benefits to debt...
-
Requirements 1. 2. 3. Assume Choice Chicken classifies all five products as joint products. What are the ending inventory values of each product on July 31, 2020? Assume Choice Chicken uses the...
-
R N- N= O----H-N N-H-----N N-H----O H Guanine H -N R R Cytosine N N= H Adenine N-HO N-----H-N -N OR Thymine 11. What type of bond allows for base pairing (represented by the dashed lines)? Compare...
-
What is the NAND only equivalent of the following circuit? D
-
What is the common difference, the general term equation, and the 12th term of the arithmetic sequence? E --5 +-6 +-7 +9 --10 +11 +12 +-13 -14 Hint: a = a + d(n-1), where a is the first term and d is...
-
In 2024, Space Technology Company modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures: Basic research to develop the technology...
-
Describe a time when a product or service was marketed to you through mobile marketing. Why do you consider this to be a mobile marketing strategy? Support your thinking with evidence from additional...
-
C QC (an-tam 2 9 A 2 3 4 5 ne G W E R T C 2 S D L A X x command C Y 17 C NOO 9 9 L 0 G HE J K L V B N M
-
Describe the general ways that the revised Form 990, applicable for tax year 2008 and beyond, is different from previous versions.
-
The following are the statements of ï¬nancial position at September 30, 2013, of Chrapaty Ltd. and Squid Ltd. Additional information: 1. During September, the shares of the companies were...
-
The accountant for Carina Ltd., Ms. Finn, has sought your advice on an accounting issue that has been puzzling her. When preparing the acquisition analysis relating to Carinas acquisition of Lyra...
-
Why is it important to identify an acquirer in a business combination?
-
Fem Company purchased goods on January 1,2020 , and issued a two-year, \(\$ 2,500\) note with a \(5 \%\) stated rate. The fair value of the goods is \(\$ 2,366\). The note requires annual interest...
-
Stonewall Corporation issued \(\$ 20,000\) of \(5 \%, 10\)-year convertible bonds. Each \(\$ 1,000\) bond is convertible to 10 shares of common stock (par \$50) of Stonewall Corporation. The bonds...
-
Darien Inc. redeemed \(\$ 5,000\) of its bonds at 102 on January 1, 2020. At this date, the unamortized discount was \(\$ 690\). Prepare the journal entry on January 1, 2020, for the bond redemption....
Study smarter with the SolutionInn App