Question
Elf Leasing purchased a machine for $600,000 and leased it to IGA, Inc. on January 1,...
Elf Leasing purchased a machine for $600,000 and leased it to
IGA, Inc. on January 1, 2018.
| Lease description: | |
| Quarterly rental payments | $31,101 at beginning of each period |
| Lease term | 6 years (24 quarters) |
| No residual value; no BPO | |
| Economic life of machine | 6 years |
| Implicit interest rate and lessee’s incremental borrowing rate | 8% |
| Fair value of asset | $600,000 |
Required:
Prepare appropriate entries for both IGA and Elf Leasing from the
beginning of the lease through the second rental payment on April
1, 2018. Amortization is recorded at the end of each fiscal year
(December 31). (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field. Round your answers to the nearest whole dollar
amounts.)
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Scape Corp. manufactures telephony equipment. Scape leased equipment to User, Inc. on January 1, 2018. Scape...
Scape Corp. manufactures telephony equipment. Scape leased
equipment to User, Inc. on January 1, 2018. Scape produced the
equipment at a cost of $5,100,000. Lease description: Quarterly
rental payments $464,353 at beginning of each period Lease term 6
years (24 quarters) No residual value; no BPO Economic life of
equipment 6 years Implicit interest rate and lessee’s incremental
borrowing rate 12% Fair value of asset $8,100,000 Required: Prepare
appropriate entries for both User and Scape from the beginning of
the...
BBB Leasing purchased a machine for $250,000 and leased it to Jack Tupp Auto Repair on...
BBB Leasing purchased a machine for $250,000 and leased it to
Jack Tupp Auto Repair on January 1, 2018.
Lease description:
Quarterly rental payments
$16,315 at beginning of each period
Lease term
5 years (20 quarters)
No residual value; no BPO
Economic life of machine
5 years
Implicit interest rate
12%
Fair value of asset
$250,000
What is the balance in the lease payable account after the April 1,
2018, lease payment?
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2016. Edison purchased the
equipment from International Machines at a cost of $125,370. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related
Information:
Lease term
2 years (8 quarterly
periods)
Quarterly rental
payments
$16,500 at the
beginning of each period
Economic life of
asset
2 years
Fair value of
asset...
Exercise 15-6 (Algo) Finance lease; lessee [LO15-2] Manufacturers Southern leased high-tech electronic equipment from Edison Leasing...
Exercise 15-6 (Algo) Finance lease; lessee [LO15-2]
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2021. Edison purchased the
equipment from International Machines at a cost of $127,024. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related Information:
Lease term
2 years (8 quarterly periods)
Quarterly rental payments
$17,000 at the beginning of each period
Economic life of...
Candy Salons Leasing leased electronic equipment to Georgia-Atlantic on January 1, 2021. Candy Salons Leasing purchased...
Candy Salons Leasing leased electronic equipment to
Georgia-Atlantic on January 1, 2021. Candy Salons Leasing purchased
the equipment from International Machines at a cost of $153,255.
Here is the related information:
Lease
term 2
years (8 quarters)
Quarterly payments $20,000 at the
beginning of each period
Economic
life 2
years
Fair value of
asset $153,255
Annual implicit rate 5%
What do the lessee’s entries include on April 1, 2021?
a.
Debit Lease Payable by $20,000
b.
Debit Lease Payable by $18,334 and Interest Expense...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment
from Edison Leasing on January 1, 2018. Edison purchased the
equipment from International Machines at a cost of $112,446. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Related Information:
Lease term
2 years (8 quarterly periods)
Quarterly rental payments
$15,300 at the beginning of each period
Economic life of asset
2 years
Fair value of asset...
Rambler Company leased a machine from Basket Leasing Company. The lease is for 4 years. The...
Rambler Company leased a machine from Basket Leasing Company.
The lease is for 4 years. The life of the asset is 4 years. The
terms of the lease require 4 payments of $100,000 at the beginning
of the year, beginning on January 1, 2018. The lease is
non-cancelable. Rambler's incremental borrowing rate is 8% and
knows Basket's 6% rate of return. There is an ungauranteed residual
value of $12,000 at the end of year 4. At the end of year...
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians'...
Rand Medical manufactures lithotripters. Lithotripsy uses shock
waves instead of surgery to eliminate kidney stones. Physicians'
Leasing purchased a lithotripter from Rand for $1,730,000 and
leased it to Mid-South Urologists Group, Inc., on January 1, 2016.
(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of
$1) (Use appropriate factor(s) from the tables
provided.)
Lease
Description:
Quarterly lease
payments
$
122,400
—beginning of each period
Lease term
5
years (20 quarters)
No...
Python Company leased equipment from Hope Leasing on January 1, 2018. Hope recently purchased the equipment...
Python Company leased equipment from Hope Leasing on January 1,
2018. Hope recently purchased the equipment at a cost of $271,910.
Other information: Lease term 4 years Annual payments $77,000 on
January 1 each year Life of asset 4 years Fair value of asset
$271,910 Implicit interest rate 9% Incremental rate 9% There is no
expected residual value. Required: Prepare appropriate journal
entries for Python for 2018. Assume straight-line depreciation and
a December 31 year-end. (If no entry is required...
Rambler Company leased a machine from Basket Leasing Company. The lease is for 4 years. The...
Rambler Company leased a machine from Basket Leasing Company.
The lease is for 4 years. The life of the asset is 5 years. The
terms of the lease require 4 payments of $100,000 at the beginning
of the year, beginning on January 1, 2017. The lease is
non-cancelable. Rambler’s incremental borrowing rate is 8% and does
not know Basket’s 6% rate of return. There is a
guaranteed residual value of $15,000 at the end of year 4. At the
end...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 5 minutes ago
asked 13 minutes ago
asked 26 minutes ago
asked 27 minutes ago
asked 50 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago