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I just need help finding out the the correct answers in the red boxes in the last picture. Marigold Incorporated leases a piece of equipment
I just need help finding out the the correct answers in the red boxes in the last picture.
Marigold Incorporated leases a piece of equipment to Splish Brothers Corporation on January 1, 2020. The lease agreement called for annual rental payments of $4,834 at the beginning of each year of the 4 -year lease. The equipment has an economic useful life of 6 years, a fair value of $25,300, a book value of $20,300, and both parties expect a residual value of $8,250 at the end of the lease term, though this amount is not guaranteed. Marigold set the lease payments with the intent of earning a 4% return, and Splish Brothers is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) Your answer is correct. Determine the nature of the lease to both Marigold and Splish Brothers. The lease is a/an lease to Marigold. The lease is a/an lease to Splish Brothers. Prepare the lease amortization schedule(s) for Splish Brothers for all 4 years of the lease. (Round answers to 0 decimal places, e.g. 5,275.) Prepare the journal entries for Splish Brothers for 2020 and 2021. (Credit account titles are automatically indented when the amount Suppose Splish Brothers incurs initial direct costs of $700 related to the lease. Prepare the journal entries for 2020 . (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order oresented in the problem.)Step by Step Solution
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