Question

on January 2, 20X7, Rocky leased additional equipment. The terms of the lease includes a non-cancelable...

on January 2, 20X7, Rocky leased additional equipment. The terms of the lease includes a non-cancelable lease term of 6 years, which is also the estimated useful life of the equipment. The lease agreement specifies annual payments of $100,000, beginning at the inception of the lease and continuing each December 31 through 20X1. The appropriate interest rate is 9%. The present value factor for an annuity due for 6 periods at 9% is 4.88965. Also on December 31, 20X7, Rocky made the second lease payment, looking for journal entry

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
Bullwinkle Corp. leased medical equipment from Rocky Co., signing a lease agreement that stipulates annual payments...
Bullwinkle Corp. leased medical equipment from Rocky Co., signing a lease agreement that stipulates annual payments of $250,000 on January 1 of each year for a five-year period. The first payment is due at the signing of the lease transaction on 1/1/17. Rocky Co. set an implicit rate of 6% in the terms of the agreement, which is equal to the incremental borrowing rate of Bullwinkle Corp. Rocky has also stipulated a residual value of $400,000 at the end of...
On January 1, 2017, the Millwork Company signed a four-year non-cancelable lease of equipment from the...
On January 1, 2017, the Millwork Company signed a four-year non-cancelable lease of equipment from the Midford Company. The annual lease payments of $35,000 are to be paid on January 1 of each year. The first payment is due on January 1, 2017. The lease contains a bargain purchase option price of $15,000. The equipment's fair value is expected to be $30,000 on December 31, 2020. The estimated economic life of the equipment is six years, and the estimated residual...
"On January 1, 20x4 Bobcat Coffee leased a smoothie machine from Smoothie LLC. Smoothie LLC purchased...
"On January 1, 20x4 Bobcat Coffee leased a smoothie machine from Smoothie LLC. Smoothie LLC purchased the equipment for a cost of 50,000. The lease agreement specifies Four annual payments of $15,000 beginning January 1, 20x4, the beginning of the lease, and at each December 31 from 20x4 to 20x7. The four year term ending December 31, 20x8, is equal to the estimated useful life of the equipment. Smoothie LLC routinely acquires smoothie equipment for lease to other vendors. The...
Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease and...
Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $50,000 over an eight-year lease term (also the asset’s useful life), with the first payment at January 1, 2019, the beginning of the lease. The interest rate is 6%. The asset being leased cost Summer $300,000 to produce. Costs of $5,866 for legal fees for the lease execution were the responsibility of the lessor. The total increase (decrease) in...
Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease and...
Beta Company leased equipment from Summer Industries. The lease agreement qualifies as a finance lease and requires annual lease payments of $50,000 over an eight-year lease term (also the asset’s useful life), with the first payment at January 1, 2019, the beginning of the lease. The interest rate is 6%. The asset being leased cost Summer $300,000 to produce. Costs of $5,866 for legal fees for the lease execution were the responsibility of the lessor. The total increase (decrease) in...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease...
At January 1, 2021, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $31,000 beginning January 1, 2021, the beginning of the lease, and at each December 31 thereafter through 2028. The equipment was acquired recently by Crescent at a cost of $234,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the...
At January 1, 2018, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease...
At January 1, 2018, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $27,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2025. The equipment was acquired recently by Crescent at a cost of $198,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the...
At January 1, 2018, Apricot leased restaurant equipment from Anderson Corporation under a six-year lease agreement...
At January 1, 2018, Apricot leased restaurant equipment from Anderson Corporation under a six-year lease agreement in an operating lease. The lease agreement specifies annual payments of $20,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2022. The equipment was acquired recently by Anderson at a cost of $105,000 (its fair value) and was expected to have a useful life of eight years with no salvage value at the end of its...
At January 1, 2018, Cafe Med leased restaurant equipment from Crescent Corporation under a nice-year lease...
At January 1, 2018, Cafe Med leased restaurant equipment from Crescent Corporation under a nice-year lease agreement. The lease agreement specifies annual payments of $34,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2025. The equipment was aquired recently by Crescent at a cost of $261,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the...
Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term...
Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term 4 years Annual payments $86,000 on January 1 each year Life of asset 4 years Implicit interest rate 9% PV, annuity due, 4 periods, 9% 3.5313 PV, ordinary annuity, 4 periods, 9% 3.2397 Hi-Tech's cost of the equipment $303,692 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018 and 2019. Assume a December 31 year-end. (If no...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT