Question

Marin enters into an agreement with Traveler Inc. to lease a car on December 31, 2016....

Marin enters into an agreement with Traveler Inc. to lease a car on December 31, 2016. The following information relates to this agreement.

1. The term of the non-cancelable lease is 3 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term.
2. The fair value of the car was $15,540 at commencement of the lease.
3. Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2017. The first payment is to be of an amount of $5,752.82, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $6,040.46 and the third and final payment will be $6,342.48).
4. Marin’ incremental borrowing rate is 8%. The rate implicit in the lease is unknown.
5. Marin uses straight-line depreciation for all similar cars.
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ANSWER

---------------------------------------------------------------------

DEAR STUDENT,
If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU**************

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
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Sunland Company....
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Sunland Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $71,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset...
Please answer all a,b,c! Eubank Company, as lessee, enters into a capitalized lease agreement on January...
Please answer all a,b,c! Eubank Company, as lessee, enters into a capitalized lease agreement on January 1, 2018, for equipment. The following data are relevant to the lease agreement: The term of the non-cancelable lease is 4 years with no renewal option. Payments of $782,757 are made at the beginning of each year. The present value of the minimum lease payments equals $2,800,000. The fair value of the equipment on 1/1/18 is $2,800,000. The equipment has an economic life of...
Company A enters into a lease agreement as lessor on january 1, 2016. the term of...
Company A enters into a lease agreement as lessor on january 1, 2016. the term of the noncancelable lease is 10 years and payment are required at the end of each year. the following information relates to this agreement: 1. Lessee has the option to purchase the asset for $12000 when the lease expires at which time the fair value is expected to be $30000 2. The asset has a cost of $100,000, an estimated useful life of 15 years,...
On January 1, 2017, Marlene Corp. enters into an agreement with Dietrich Rentals Inc. to lease...
On January 1, 2017, Marlene Corp. enters into an agreement with Dietrich Rentals Inc. to lease a machine from them. Both corporations adhere to ASPE. The following data relate to the agreement: 1. The term of the non-cancellable lease is three years with no renewal option. Payments of $271,622 are due on December 31 of each year. 2. The fair value of the machine on January 1, 2017, is $700,000. The machine has a remaining economic life of 10 years,...
On December 31, 2016, Sage Hill Corporation signed a 5-year, non-cancelable lease for a machine. The...
On December 31, 2016, Sage Hill Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Sage Hill to make annual payments of $8,026 at the beginning of each year, starting December 31, 2016. The machine has an estimated useful life of 6 years and a $4,900 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Sage Hill uses the straight-line method of depreciation for all...
Sunland Corporation enters into a 7-year lease of equipment on December 31, 2016, which requires 7...
Sunland Corporation enters into a 7-year lease of equipment on December 31, 2016, which requires 7 annual payments of $39,300 each, beginning December 31, 2016. In addition, Sunland guarantees the lessor a residual value of $19,200 at the end of the lease. However, Sunland believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years. Prepare Sunlands' December 31, 2016, journal entries assuming...
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Metlock Company....
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Metlock Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $56,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset...
Brief Exercise 21-24 Marin, Inc. has entered an agreement to lease an old warehouse with a...
Brief Exercise 21-24 Marin, Inc. has entered an agreement to lease an old warehouse with a useful life of 5 years and a fair value of $36,000 from United Corporation. The agreement stipulates the following. ● Rental payments of $8,633 are to be made at the start of each year of the 5-year lease. No residual value is expected at the end of the lease. ● Marin must reimburse United each year for any real estate taxes incurred for the...
On December 31, 2016, Tamarisk Corporation signed a 5-year, non-cancelable lease for a machine. The terms...
On December 31, 2016, Tamarisk Corporation signed a 5-year, non-cancelable lease for a machine. The terms of the lease called for Tamarisk to make annual payments of $8,978 at the beginning of each year, starting December 31, 2016. The machine has an estimated useful life of 6 years and a $5,200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Tamarisk uses the straight-line method of depreciation for all of its plant...
Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Skysong Company....
Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Skysong Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2017, is $56,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT