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Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Marin Company. The following information relates to this agreement. 1. The
Laura Leasing Company signs an agreement on January 1, 2017, to lease equipment to Marin Company. The following information relates to this agreement. 1. The term of the noncancelable lease is 5 years with no renewal option. The equipment has arn estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2017, is $82,500. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected 3. to have a residual value of $6,400, none of which is guaranteed. 4. Marin Company assumes direct responsibility for all executory costs, which include the following annual amounts: (1) $910 to Rocky Mountain Insurance Company for insurance and (2) $1,670 to Laclede County for property taxes. 5. The agreement requires equal annual rental payments of $18,831.83 to the lessor, beginning on January 1, 2017 6. The lessee's incremental borrowing rate is 12%. The lessor's implicit rate is 10% and is known to the lessee 7. Marin Company uses the straight-line depreciation method for all equipment. 8. Marin uses reversing entries when appropriate. Click here to view factor tables Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e1.25124 and Round answers to 2 decimal places, e.g 15.25. MARIN COMPANY (Lessee) Lease Amortization Schedule Annual Lease Date Payment Interest on Liability Reduction of Lease Liability Lease Liability 1/1/20 1/1/21
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