Question

On December 31, 2000, Reilly Co. leased a machine from Bass, Inc. for a five-year period....

On December 31, 2000, Reilly Co. leased a machine from Bass, Inc. for a five-year period. Equal annual payments under the noncancelable lease are $315,000 (including $15,000 annual executory costs) and are due on December 31 of each year. The first payment was made on December 31, 2000, and the second payment was made on December 31, 2001. The present value of minimum lease payments at the inception of the lease (prior to the first annual payment) was $1,256,000. The lease is appropriately accounted for as a capital lease by Reilly.

In its December 31, 2001 balance sheet, Reilly should report a lease liability of?

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
Rumsfeld Corporation leased a machine on December 31, 2021, for a three-year period. The lease agreement...
Rumsfeld Corporation leased a machine on December 31, 2021, for a three-year period. The lease agreement calls for annual payments in the amount of $15,000 on December 31 of each year beginning on December 31, 2021. Rumsfeld has the option to purchase the machine on December 31, 2024, for $16,000 when its fair value is expected to be $26,000. The machine's estimated useful life is expected to be five years with no residual value. The appropriate interest rate for this...
Federated Fabrications leased a tooling machine on January 1, 2018, for a three-year period ending December...
Federated Fabrications leased a tooling machine on January 1, 2018, for a three-year period ending December 31, 2020. The lease agreement specified annual payments of $36,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2019. The company had the option to purchase the machine on December 30, 2020, for $45,000 when its fair value was expected to be $60,000, a sufficient difference that exercise seems reasonably certain. The Machine's estimated useful life...
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...
On December 31, 2017, Day Company leased a new machine from Parr with the following pertinent...
On December 31, 2017, Day Company leased a new machine from Parr with the following pertinent information: Lease term 5 years Annual rental payable on December 31 (beginning December 31, 2017) $50,000 Useful life of machine 8 years Day's incremental borrowing rate 15% Implicit interest rate in lease (known by Day) 11% The lease is not renewable, and the machine reverts to Parr at the termination of the lease. The cost of the machine on Parr's accounting records is $375,500....
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 December 31, 2007, Pool Corporation leased a ship from Renn Company for an eight-year period...
On December 31, 2007, Pool Corporation leased a ship from Renn Company for an eight-year period expiring December 30, 2015. Equal annual payments of $200,000 are due on December 31 of each year, beginning with December 31, 2007. The lease is properly classified as a capital lease on Pool's books. The present value at December 31, 2007 of the eight lease payments over the lease term discounted at 10% is $1,173,685. Assuming all payments are made on time, the amount...
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.
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, 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....
Rumsfeld Corporation leased a machine on December 31, 2018, for a three-year period. The lease agreement...
Rumsfeld Corporation leased a machine on December 31, 2018, for a three-year period. The lease agreement calls for annual payments in the amount of $17,500 on December 31 of each year beginning on December 31, 2018. Rumsfeld has the option to purchase the machine on December 31, 2021, for $21,500 when its fair value is expected to be $31,500. The machine's estimated useful life is expected to be five years with no residual value. The appropriate interest rate for this...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT