(Cli P18.1 (similar to) Alonzo Partners (AP) agreed to lease a piece of heavy equipment to Soto Company on January 1. AP paid $227,000 to produce the machine and carried it at this amount in its inventory. This machine is routinely produced by AP and is part of its standard stock in inventory. The fair value (current selling price) of the machine is $246,563. The lease terms follow (Click the icon to view the lease terms.) Read the requirements tab (CI Or (c Ar table.) Alonzo Partners $227.000 to produce the machine and carried it at this amount in its inventory. This machine is routinely produced by AP and is part of its standard stock in inventory. The fair value (current selling price) of the machine is $246,563. The lease terms follow. (Click the icon to view the lease terms.) Read the requirements (Click the icon Ordinary Annu (Click the icon Annuity Due ta Requirement a. Computhe implicit rate. (Use the present value and future value tables, the formula method, a financial calculator formula method, use fact amounts rounded to five decimal places, X.XXXXX. Round your answer to the nearest whole percent, X- The implicit rate in the lease is resent plus and future la tablae the formula method a financial calolator or onaadeboat forspur calculation. If usin ecimal Requirements a. Compute the implicit rate. b. Classify this lease agreement for both the lessor and the lessee. c. Prepare an amortization table for the lease. d. Prepare the journal entries for the lessor and the lessee during the first year of the contract. Print Done Base a piece of heavy equipment U and carried it at this amount in its inventory. This machine is routinely standard stock in inventory. The fair value (current selling price) of the arms follow. se terms.) More Info table) Click the inn. sowie Et Value of an X e of an $1 table) (Click the icon to view the Pr an Ordinary Annuity table) (Click the icon to view the an Annuity Due table. pur calculation. If using present and future licit rate. (Use the present is rounded to five decimal % Annual rental payments of $52,300 are due on January 1 of each year. These rental payments do not include any other lease components Lease term is 7 years There is a purchase option that is reasonably expected to be exercised to acquire the asset at the end of 5 years for $24,000, The lessor expects to recover the guaranteed residual value of $44,000 at the termination of the lease. The lessee guarantees the residual value The economic life of the asset is 8 years. Soto Company knows the lessor's implicit rate The lessee's incremental borrowing rate is 10% . Annual maintenance is $15,000 and annual training is $8,400. The lessee pays both at the end of the year to an independent third party AP indicates that the collection of the lease payments is reasonably assured and the recovery of the residual value is probable Soto depreciates (amortizes) similar machinery that it owns using the straight-line method Print Done and then click Check Answer (Cli P18.1 (similar to) Alonzo Partners (AP) agreed to lease a piece of heavy equipment to Soto Company on January 1. AP paid $227,000 to produce the machine and carried it at this amount in its inventory. This machine is routinely produced by AP and is part of its standard stock in inventory. The fair value (current selling price) of the machine is $246,563. The lease terms follow (Click the icon to view the lease terms.) Read the requirements tab (CI Or (c Ar table.) Alonzo Partners $227.000 to produce the machine and carried it at this amount in its inventory. This machine is routinely produced by AP and is part of its standard stock in inventory. The fair value (current selling price) of the machine is $246,563. The lease terms follow. (Click the icon to view the lease terms.) Read the requirements (Click the icon Ordinary Annu (Click the icon Annuity Due ta Requirement a. Computhe implicit rate. (Use the present value and future value tables, the formula method, a financial calculator formula method, use fact amounts rounded to five decimal places, X.XXXXX. Round your answer to the nearest whole percent, X- The implicit rate in the lease is resent plus and future la tablae the formula method a financial calolator or onaadeboat forspur calculation. If usin ecimal Requirements a. Compute the implicit rate. b. Classify this lease agreement for both the lessor and the lessee. c. Prepare an amortization table for the lease. d. Prepare the journal entries for the lessor and the lessee during the first year of the contract. Print Done Base a piece of heavy equipment U and carried it at this amount in its inventory. This machine is routinely standard stock in inventory. The fair value (current selling price) of the arms follow. se terms.) More Info table) Click the inn. sowie Et Value of an X e of an $1 table) (Click the icon to view the Pr an Ordinary Annuity table) (Click the icon to view the an Annuity Due table. pur calculation. If using present and future licit rate. (Use the present is rounded to five decimal % Annual rental payments of $52,300 are due on January 1 of each year. These rental payments do not include any other lease components Lease term is 7 years There is a purchase option that is reasonably expected to be exercised to acquire the asset at the end of 5 years for $24,000, The lessor expects to recover the guaranteed residual value of $44,000 at the termination of the lease. The lessee guarantees the residual value The economic life of the asset is 8 years. Soto Company knows the lessor's implicit rate The lessee's incremental borrowing rate is 10% . Annual maintenance is $15,000 and annual training is $8,400. The lessee pays both at the end of the year to an independent third party AP indicates that the collection of the lease payments is reasonably assured and the recovery of the residual value is probable Soto depreciates (amortizes) similar machinery that it owns using the straight-line method Print Done and then click Check
