Question
Exercise 21-8 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Pronghorn Leasing Company and Stellar Company, a lessee. Inception date:
Exercise 21-8 (Part Level Submission)
The following facts pertain to a noncancelable lease agreement between Pronghorn Leasing Company and Stellar Company, a lessee.
Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $21,737.01 Bargain-purchase option price at end of lease term $3,800 Lease term 5 years Economic life of leased equipment 10 years Lessors cost $68,000 Fair value of asset at May 1, 2017 $93,000 Lessors implicit rate 10 % Lessees incremental borrowing rate 10 %
The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. The expected residual value of the equipment at the end of 5 (10) years is $12,000 ($0). Click here to view factor tables
[Collapse question part]
(c)
Prepare a lease amortization schedule for Stellar Company for the 5-year lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25126 and Round answers to 2 decimal places, e.g. 15.25.)
STELLAR COMPANY (Lessee) Lease Amortization Schedule Date Annual Lease Payment Plus BPO Interest on Liability Reduction of Lease Liability Lease Liability 5/1/17 $ $ $ $ 5/1/17 5/1/18 5/1/19 5/1/20 5/1/21 4/30/22 $ $ $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started