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Concord Inc. leased a new crane to Bridgeport Construction Inc. under a six - year, non - cancellable contract starting February 1 , 2 0
Concord Inc. leased a new crane to Bridgeport Construction Inc. under a sixyear, noncancellable contract starting February The lease terms require payments of $ each February starting February Concord will pay insurance and repair and maintenance charges on the crane, which has an estimated life of years, a fair value of $ and a cost to Concord of $ The crane's estimated fair value is $ at the end of the lease term. No bargain purchase or renewal options are included in the contract. Both Concord and Bridgeport have calendar year ends and use IFRS. Collectibility of the lease payments is reasonably certain and there are no uncertainties about unreimbursable lessor costs. Bridgeport's incremental borrowing rate is and Concord's implicit interest rate of is known to Bridgeport. Hint: Use a financial calculator or Excel function to arrive at the present value of the lease.
b
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Would the classification of the lease have been different if Concord and Bridgeport had been using ASPE?
Attempts: of used
c
Prepare all the entries related to the lease contract and leased asset for the year for the lessee and lessor, assuming the following executory costs: insurance of $ covering the period February to January and a oneyear maintenance contract beginning February costing $ Straightline depreciation is used for similar leased assets. The crane is expected to have a residual value of $ at the end of its useful life. List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter for the amounts. Round answers to decimal places, eg
Lessee's Entries
Date
Account Titles and Explanation
Debit
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