Question

Francisco leased equipment from Julio on December 31, 2021. The lease is a 10-year lease with...

Francisco leased equipment from Julio on December 31, 2021. The lease is a 10-year lease with annual payments of $155,000 due on December 31 of each year beginning December 31, 2021. The present value of the lease payments is $1,123,268. Francisco's incremental borrowing rate is 10% for this type of lease. The implicit rate of 8% is known by the lessee. What should be the balance in Francisco lease liability at December 31, 2022?

Multiple Choice

  • $968,268.

  • $897,239.

  • $885,729.

  • $890,729.

THANKS

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
particulars amount  
present value of lease payment $ 11,23,268.00
less annaul lease payment made oin31.12.2021 $ (1,55,000.00)
value as on 31.12.2021 $    9,68,268.00
interest@8% $       77,461.44
total value $ 10,45,729.44
less annaul lease payment made oin31.12.2022 $ (1,55,000.00)
value as on 31.12.2022 $    8,90,729.
THANKS IN ADVANCE FOR GIVING ME POSITIVE RATINGS
MAY GOD BLESS YOU
STAY HOME STAY SAFE
HAVE A WONDERFUL DAY
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Francisco leased equipment from Julio on December 31, 2021. The lease is a 10-year lease with...
Francisco leased equipment from Julio on December 31, 2021. The lease is a 10-year lease with annual payments of $152,000 due on December 31 of each year beginning December 31, 2021. The present value of the lease payments is $1,063,278. Francisco's incremental borrowing rate is 11% for this type of lease. The implicit rate of 9% is known by the lessee. What should be the balance in Francisco lease liability at December 31, 2022? Multiple Choice $841,293. $911,278. $839,793. $847,803.
Francisco leased equipment from Julio on December 31, 2018. The lease is a 10-year lease with...
Francisco leased equipment from Julio on December 31, 2018. The lease is a 10-year lease with annual payments of $158,000 due on December 31 of each year beginning December 31, 2018. The present value of the lease payments is $1,130,000. Francisco's incremental borrowing rate is 12% for this type of lease. The implicit rate of 11% is known by the lessee. What should be the balance in Francisco lease liability at December 31, 2019? Multiple Choice $972,000. $920,920. $927,430. $919,420.
On January 1, 2021, Packard Corporation leased equipment to Hewlitt Company. The lease term is 12...
On January 1, 2021, Packard Corporation leased equipment to Hewlitt Company. The lease term is 12 years. The first payment of $453,000 was made on January 1, 2021. Remaining payments are made on December 31 each year, beginning with December 31, 2021. The equipment cost Packard Corporation $3,361,310. The present value of the lease payments is $3,395,263. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 10%, what will be the balance...
Franklin, Inc. leased equipment from Juniper Co. on December 31, 2018. The lease meets the criteria...
Franklin, Inc. leased equipment from Juniper Co. on December 31, 2018. The lease meets the criteria of a finance lease under the new lease accounting standard. The lease requires annual payments of $150,000 due on December 31 of each year, beginning December 31, 2018. The present value of the lease payments is $1,020,000. The interest rate implicit in the lease is 8%. Of the payment due on December 31, 2019, how much will Franklin record as interest expense? (Round to...
Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The...
Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discounted at 8% was $61,600. Ten annual lease payments of $8,500 are due each year beginning July 1, 2021. Smith Co. had constructed the equipment recently for $53,500, and its retail fair value was $61,600. The total decrease in earnings (pretax) in Karla's December 31, 2021, income statement would be (ignore taxes): Multiple Choice $3,296. $6,376. $4,928. $5,204.
On December 31, 2018, Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period...
On December 31, 2018, Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period ending December 31, 2022, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost Rhone-Metro $347,516 and has an expected useful life of six years. Its normal sales price is $347,516. The lessee-guaranteed residual value at December 31, 2022, is $17,000. Equal payments under the lease are $95,000 and are due on December 31 of each year. The...
On January 1, 2021, Miller Company leased equipment from Alpha Louse Corp. Alphe Lease Corp purchased...
On January 1, 2021, Miller Company leased equipment from Alpha Louse Corp. Alphe Lease Corp purchased the equipment at a cost of $150.000. The agreement specified three payments of $50,000 beginning January 1, 2021, the beginning of the lense, and on each December 31 thereafter through 2022. The useful life of the equipment is estimated to be five years wor's implicit rate was 5%. The present value of those three payments at a discount rate of % is $142,971, On...
Rhone-Metro Industries manufactures equipment that is sold or leased. On December 31, 2018, Rhone-Metro leased equipment...
Rhone-Metro Industries manufactures equipment that is sold or leased. On December 31, 2018, Rhone-Metro leased equipment to Western Soya Co. for a four-year period ending December 31, 2022, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost $580,000 to manufacture and has an expected useful life of six years. Its normal sales price is $618,738. The expected residual value of $26,000 at December 31, 2022, is not guaranteed. Equal payments under the lease...
Lessee Company enters into a lease on January 1, 2021, that is accounted for as a...
Lessee Company enters into a lease on January 1, 2021, that is accounted for as a finance lease. The lease calls for quarterly payments of $20,000, beginning on January 1, 2021, and continuing for 5 years. The last payment is due on October 1, 2025. The lease has an implicit annual interest rate of 9%. The present value of an annuity due at 9% per period for 5 periods is 4.240; the present value of an annuity due at 2.25%...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 10% rate of return for providing long-term financing. The lease agreement specified the following: Ten annual payments of $60,000 beginning January 1, 2021, the beginning of the lease and each December 31 thereafter through 2029. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $354,849. The lease qualifies...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT