On January 1, 2022 the Red Corp. leased an equipment with the following information: Fixed annual...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2022 the Red Corp. leased an equipment with the following information: Fixed annual payments at the end of each year Lease term Useful life of equipment Residual value at the end of the useful life Implicit rate Incremental borrowing rate Dismantling and restoration costs Initial direct cost Red corporation has the option the buy the unit at the end of the lease for : and it is reasonably certain that it will exercise its bargain price option Lease incentive received from Lessor on Jan. 1, 2022 Cash deposit/advance to the lessor on Jan. 1, 2022 PV of annuity of 1 for 10 periods @ 12% PV of 1 for 10 periods @ 12% 1,000,000 10 years 12 years 600,000 12% 14% 100,000 250,000 700,000 150,000 1,000,000 5.6502 0.3220 Required: A) Analyze then show your solutions in the analysis and solution1 worksheet. B) From the analysis and solutions 1worksheet, transpose your answers to this answer worksheet in the highlighted spaces. If otherwise, invalidated answer = 0 C) Prepare and show the amort shed1 and the JE1's in the allotted worksheets 1) What is the initial lease liability? 2) What is the cost of right of use asset? 3) How much is the depreciation expense for year 2022? 4) How much is the book value of the ROUA at the end of year 2022? 6) How much is the interest expense at the end of year 2022? 7) How much is the carrying cost of Lease Liab. At the end of the 10 year 5) Prepare an amortization schedule 8) Prepare the journal entries for year 2022 lease? Answer see amort sched1 see JE1 LEASE LIAB. AMORTIZATION SCHEDULE Year Date Payment Interest Expense Principal CA of Liabilities pts RED CORPORATION JOURNAL ENTRIES Date Particulars Debit Credit PFRS16 LESSEE ACCOUNTING RED CORPORATION Problem Analysis and computations Required: 1) What is the initial lease liability? 2) What is the cost of right of use asset? 3) How much is the depreciation expense for year 2022? 4) How much is the book value of the ROUA at the end of year 2022? 5) Prepare an amortization schedule 6) Prepare the journal entries to record the transactions in Lessee books for 2022 and 2023 On January 1, 2022 the Red Corp. leased an equipment with the following information: Fixed annual payments at the end of each year Lease term Useful life of equipment Residual value at the end of the useful life Implicit rate Incremental borrowing rate Dismantling and restoration costs Initial direct cost Red corporation has the option the buy the unit at the end of the lease for : and it is reasonably certain that it will exercise its bargain price option Lease incentive received from Lessor on Jan. 1, 2022 Cash deposit/advance to the lessor on Jan. 1, 2022 PV of annuity of 1 for 10 periods @ 12% PV of 1 for 10 periods @ 12% 1,000,000 10 years 12 years 600,000 12% 14% 100,000 250,000 700,000 150,000 1,000,000 5.6502 0.3220 Required: A) Analyze then show your solutions in the analysis and solution1 worksheet. B) From the analysis and solutions 1worksheet, transpose your answers to this answer worksheet in the highlighted spaces. If otherwise, invalidated answer = 0 C) Prepare and show the amort shed1 and the JE1's in the allotted worksheets 1) What is the initial lease liability? 2) What is the cost of right of use asset? 3) How much is the depreciation expense for year 2022? 4) How much is the book value of the ROUA at the end of year 2022? 6) How much is the interest expense at the end of year 2022? 7) How much is the carrying cost of Lease Liab. At the end of the 10 year 5) Prepare an amortization schedule 8) Prepare the journal entries for year 2022 lease? Answer see amort sched1 see JE1 LEASE LIAB. AMORTIZATION SCHEDULE Year Date Payment Interest Expense Principal CA of Liabilities pts RED CORPORATION JOURNAL ENTRIES Date Particulars Debit Credit PFRS16 LESSEE ACCOUNTING RED CORPORATION Problem Analysis and computations Required: 1) What is the initial lease liability? 2) What is the cost of right of use asset? 3) How much is the depreciation expense for year 2022? 4) How much is the book value of the ROUA at the end of year 2022? 5) Prepare an amortization schedule 6) Prepare the journal entries to record the transactions in Lessee books for 2022 and 2023
Expert Answer:
Answer rating: 100% (QA)
To answer your questions I will perform the necessary calculations and provide the solutions step by step 1 Initial Lease Liability The initial lease liability can be calculated as the present value o... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
Posted Date:
Students also viewed these finance questions
-
Lillis Manufacturing makes a variety of industrial fittings. The products are similar, but not identical, and all go through the same processes. Some orders from Lillis go to companies in regions...
-
S Gonzalez Company is considering two new projects with the following net cash flows. The company's required rate of return on investments is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note:...
-
Physical constants Planks constant h=6.62607x10-4 JS Reduced planks constant h=1.05457x104 JS Boltzmann constant K =1.38066x10-23J/K Electron-Volt (ev)=1.60218x10- J Elementary charge (q)=1.60218x10-C
-
Assume a portfolio of two assets with the following total value (Al) covariance matrix 1 -0.5 -0.5 1 The sum of the 99% component VaRs of the two assets is:
-
Suppose in 2017 that Campbell Soup Company reported average total assets of $6,265 million, net sales of $7,586 million, and net income of $736 million. What was Campbell Soup's return on assets?
-
Use a parametrization to find the flux across the surface in the specified direction. Across the sphere x 2 + y 2 + z 2 = a 2 in the direction away from the origin JsF.n do JJ S
-
What would be the characteristics of a cumulative redeemable participating convertible preference share?
-
On December 31, Year 1, Kelly Corporation of Toronto paid 13.7 million Libyan dinars (LD) for 100% of the outstanding common shares of Arkenu Company of Libya. On this date, the fair values of...
-
6-6 Prepare an amortization schedule using the following information: $75,000 principal, 10 percent annual interest rate, five annual payments of $19,784.65 each.
-
The Springfield School Board has made the decision to close one of its middle schools (sixth, seventh, and eighth grades) at the end of this school year and reassign all of next year's middle school...
-
You are a legal practitioner in a legal firm in your chosen South Pacific country. You represent a foreign client who has been asked to sign a contract that specifies that any dispute will be...
-
What are four Direct Competitors of Mott's Fruistsations Apple Sauce Provide examples with reference.
-
A cable is attached between B and C. The cable is attached in such a way that it has a tension of TBC along its length. The tensile force will Ittempt to pull B toward C. The force exerted on B has a...
-
If a path has two resistors, one 20 and the other 30 , and a potential difference of 50 V is applied across the whole path, what is the voltage drop across the 30 resistor
-
Consider the initial value problem 4t(y+1)/y (0 t 5), y(0) = 1. The exact solution of this problem is y(t) = (2t + 2) - 1. Write a Matlab program using the two-step Adams-Bashforth method to...
-
What makes a Great Leader," speaker - Roselinde Torres 1. Explain elements of the video presentation with which you agree and disagree. Defend your position with specific explanations.
-
If a company has $300 million of debt and $600 million of equity in its capital structure, what are its debt/total capitalization and debt/equity ratios?
-
Copy and complete the statement. 3800 m ? km =
-
Ramirez Inc., a publishing company, is preparing its December 31, 2011 financial statements and must determine the proper accounting treatment for the following situations. The company has retained...
-
On April 1, 2012, Taylor Corp. sold 12,000 of its $1,000 face value, 15-year, 11% bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond...
-
Shankman Corporation had two issues of securities outstanding: common shares and an 8% convertible bond issue in the face amount of $8 million. Interest payment dates of the bond issue are June 30...
-
A reservoir at vertex 1 in the diagram below is to supply water to several pumping stations. The edge weights are costs of laying pipe from one station to another. How should the pipe be laid so that...
-
Identify which internal control concept is being violated and explain how this may cause an opportunity for fraud to occur within a business: 1. The supervisor for the purchasing department has not...
-
All of the following are typically included in the cash and cash equivalents account except: a. Cash b. Marketable securities c. Money market funds d. 30-day U.S. Treasury bills
Study smarter with the SolutionInn App