Problem 2 On January 1, 2020, Nath Services, Ic., leased several computers under a four-year lease...

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Problem 2 On January 1, 2020, Nath Services, Ic., leased several computers under a four-year lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for payments of $10,000 each. The first payment is on January 1, 2020. Subsequent payments are payable semiannually on June 30 and December 31 each year. The lease does not mention title being passed, nor is there a purchase option. The computers were acquired by ComputerWorld at a cost of $50,000 and were expected to have a useful life of five years with no residual value. The cash value of the computers on January 1, 2020 was $75,000. Both firms use straight-line amortization and depreciation. Requirements: 1. Determine the total Lease Payments. 2. Determine the type of lease. 3. Create an amortization table. 4. Prepare appropriate journal entries for Nath from January 1, 2020 through December 31, 2020. 5. Prepare appropriate journal entries for ComputerWorld Leasing from January 1, 2020 through December 31, 2020. 1 PV of LP 2 Lease Classification Amortization Table Calculations Here: Lease Type (select) Period Cash Interest Princpal Balance Calculations Here: Nath ComputerWorld Problem 2 On January 1, 2020, Nath Services, Ic., leased several computers under a four-year lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for payments of $10,000 each. The first payment is on January 1, 2020. Subsequent payments are payable semiannually on June 30 and December 31 each year. The lease does not mention title being passed, nor is there a purchase option. The computers were acquired by ComputerWorld at a cost of $50,000 and were expected to have a useful life of five years with no residual value. The cash value of the computers on January 1, 2020 was $75,000. Both firms use straight-line amortization and depreciation. Requirements: 1. Determine the total Lease Payments. 2. Determine the type of lease. 3. Create an amortization table. 4. Prepare appropriate journal entries for Nath from January 1, 2020 through December 31, 2020. 5. Prepare appropriate journal entries for ComputerWorld Leasing from January 1, 2020 through December 31, 2020. 1 PV of LP 2 Lease Classification Amortization Table Calculations Here: Lease Type (select) Period Cash Interest Princpal Balance Calculations Here: Nath ComputerWorld

Answer rating: 100% (QA)

Minimum Lease Payment Date Installemnt PVAF 2 PV Journal Entry of Nath 010120 10000 1 10000 Date Acc... View the full answer