Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

just need the dep exp Calculate the PV of the future minimum lease payments using any of the following methods: (1) factor tables, (2) a

image text in transcribed

image text in transcribed

image text in transcribedimage text in transcribed

just need the dep exp

Calculate the PV of the future minimum lease payments using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel functions. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 1,452.) Present value Your answer is correct. Prepare an amortization schedule for Crane for the lease term. Use Excel. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round c lecimal places, e.g. 1,452.) Prepare all of Crane's journal entries for 2023 to record the lease agreement and the lease payments. Crane's accounting period ends on December 31 . Ignore payments of insurance and property taxes. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Oakridge Leasing Corporation signs an agreement on January 1, 2023, to lease equipment to Crane Limited. Oakridge and Crane follow ASPE. The following information relates to the agreement: 1. The term of the non-cancellable lease is five years, with no renewal option. The equipment has an estimated economic life of six years. 2. The asset's fair value at January 1,2023 , is $85,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $6,800, which is guaranteed. 4. Crane assumes direct responsibility for all executory costs, which include the following annual amounts: $900 to Rocky Mountain Insurance Ltd. for insurance and \$1,610 to James Township for property taxes. 5. The agreement requires equal annual rental payments of $19,006 to Oakridge, the lessor, beginning on January 1, 2023. 6. The lessee's incremental borrowing rate is 10%. The lessor's implicit rate is 9% and is known to the lessee. 7. Crane uses the straight-line depreciation method for all equipment. 8. Crane uses reversing entries when appropriate

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Textbook For Students And Researchers

Authors: Mukhiddin Kalonov

1st Edition

6206174077, 978-6206174073

More Books

Students also viewed these Accounting questions