Kingbird Company leases an automobile with a fair value of $10,297 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months 2. Rental of $210 per month (at the beginning of each month. (The present value at 0.5% per month is $9,317.) 3. Kingbird guarantees a residual value of $1 000 the present value at 0.5% per month is $779 Delaney expects the probable es 4. Estimated economic life of the automobile is 60 months. 5. Kingbird's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. a valueto e S1 000 at een o the ease term Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Your answer is correct. What is the nature of this lease to Kingbird? The nature of this lease is a/an finance lease. Your answer is incorrect. Try again. What is the present value of the lease payments to determine the lease liability? (Round answer to O decimal places, e.g. 5,275.) Present value of the lease payments 11279 Your answer is partially correct. Try again. Based on the original fact pattern, record the lease on Kingbird's books at the date of commencement. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Leased Equipment 11279 ase Liabilit 11279 Kingbird Company leases an automobile with a fair value of $10,297 from John Simon Motors, Inc., on the following terms: 1. Non-cancelable term of 50 months 2. Rental of $210 per month (at the beginning of each month. (The present value at 0.5% per month is $9,317.) 3. Kingbird guarantees a residual value of $1 000 the present value at 0.5% per month is $779 Delaney expects the probable es 4. Estimated economic life of the automobile is 60 months. 5. Kingbird's incremental borrowing rate is 6% a year (0.5% a month). Simon's implicit rate is unknown. a valueto e S1 000 at een o the ease term Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Your answer is correct. What is the nature of this lease to Kingbird? The nature of this lease is a/an finance lease. Your answer is incorrect. Try again. What is the present value of the lease payments to determine the lease liability? (Round answer to O decimal places, e.g. 5,275.) Present value of the lease payments 11279 Your answer is partially correct. Try again. Based on the original fact pattern, record the lease on Kingbird's books at the date of commencement. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Leased Equipment 11279 ase Liabilit 11279
