Coronado Inc manufactures an X ray machine with an estimated life of 12 years and leases it to Whispering Medical Center for a period of 10 years The normal selling price of the machine is $382,782, and its guaranteed residual value at the end of the noncancelable lease term is estimated to be $14,600 The hospital will pay rents of $55,800 at the beginning of each year and all maintenance, insurance, and taxes Coronado Inc incurred costs of $257,000 in manufacturing the machine and $14,800 in negotiating and closing the lease Coronado Inc has determined that the collectibility of the lease payments is reasonably predictable, that there will be no additional costs incurred, and that the implicit interest rate is 10 Whispering Medical Center has an incremental borrowing rate of 10 REQUIRES USE OF FACTOR TABLES Compute the amount of the initial lease liability (Round present value factor calculations to 5 decimal places, e g 1 25124 and the final answer to 0 decimal places e g 58,971 ) The amount of the initial obligation under capital leases $ Prepare a 10 year lease amortization schedule (Round answers to 0 decimal places e g 58,971 ) Prepare all of the lessees journal entries for the first year (Credit account titles are automatically indented when amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts Round answers to 0 decimal places e g 58,971 ) List of Accounts Accounts Payable Accumulated DepreciationBuilding Accumulated DepreciationCapital Leases Accumulated DepreciationEquipment Airplanes Buildings Cash Cost of Goods Sold Depreciation Expense Equipment Executory Costs Executory Costs Payable Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Inventory Land Leased Buildings Leased Equipment Leased Land Lease Liability Lease Receivable Loss on Capital Lease Machinery Maintenance and Repairs Expense No Entry Prepaid Lease Executory Costs Property Tax Expense Property Tax Payable Rent Expense Rent Payable Rent Receivable Rent Revenue Revenue from Sale Leaseback Salaries and Wages Expense Sales Revenue Selling Expenses Trucks Unearned Profit on Sale Leaseback Unearned Service Revenue USE ONLY THESE ACCOUNT TITLES REQUIRES USE OF FACTOR TABLE SHOW WORK ANSWER ALL PARTS IN THE FORMATS ABOVE THANK YOU WHISPERING MEDICAL (Lessee) Lease Amortization Schedule (Annuity Due Basis, GRV) Beginning Annual Lease Payment Plus GRV Interest on Reduction of Lease Liability Lease Liability of Year Initial PV 4 10 End of 10 Account Titles and Explanation Debit Credit (To record the lease of x ray equipment using capital lease method ) (To record payment of annual lease obligation ) (To record accrual of annual interest on lease obligation ) (To record depreciation expense for year 1 using straight line method )

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Coronado Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Whispering Medical Center for a period of 10

Coronado Inc. manufactures an X-ray machine with an estimated life of 12 years and leases it to Whispering Medical Center for a period of 10 years. The normal selling price of the machine is $382,782, and its guaranteed residual value at the end of the noncancelable lease term is estimated to be $14,600. The hospital will pay rents of $55,800 at the beginning of each year and all maintenance, insurance, and taxes. Coronado Inc. incurred costs of $257,000 in manufacturing the machine and $14,800 in negotiating and closing the lease. Coronado Inc. has determined that the collectibility of the lease payments is reasonably predictable, that there will be no additional costs incurred, and that the implicit interest rate is 10%. Whispering Medical Center has an incremental borrowing rate of 10%.

*REQUIRES USE OF FACTOR TABLES*

Compute the amount of the initial lease liability. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

The amount of the initial obligation under capital leases

Prepare a 10-year lease amortization schedule. (Round answers to 0 decimal places e.g. 58,971.)

Prepare all of the lessees journal entries for the first year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 58,971.)

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List of Accounts

Accounts Payable
Accumulated DepreciationBuilding
Accumulated DepreciationCapital Leases
Accumulated DepreciationEquipment
Airplanes
Buildings
Cash
Cost of Goods Sold
Depreciation Expense
Equipment
Executory Costs
Executory Costs Payable
Insurance Expense
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Leased Buildings
Leased Equipment
Leased Land
Lease Liability
Lease Receivable
Loss on Capital Lease
Machinery
Maintenance and Repairs Expense
No Entry
Prepaid Lease Executory Costs
Property Tax Expense
Property Tax Payable
Rent Expense
Rent Payable
Rent Receivable
Rent Revenue
Revenue from Sale-Leaseback
Salaries and Wages Expense
Sales Revenue
Selling Expenses
Trucks
Unearned Profit on Sale-Leaseback
Unearned Service Revenue

USE ONLY THESE ACCOUNT TITLES

REQUIRES USE OF FACTOR TABLE

SHOW WORK

ANSWER ALL PARTS IN THE FORMATS ABOVE

THANK YOU

WHISPERING MEDICAL (Lessee) Lease Amortization Schedule (Annuity Due Basis, GRV) Beginning Annual Lease Payment Plus GRV Interest on Reduction of Lease Liability Lease Liability of Year Initial PV 4 10 End of 10 Account Titles and Explanation Debit Credit (To record the lease of x-ray equipment using capital lease method.) (To record payment of annual lease obligation.) (To record accrual of annual interest on lease obligation.) (To record depreciation expense for year 1 using straight-line method.)