nud.com/cn/a/3373/ta/id/10186 D Question 1 3 pts and from the company 1, 2016. for the year period Pof $15.00 eachDecember 31 The die Auswete aginasaritaleta eartat the renterataste Red For we wo) Per Dec.2016. books At December 31, 2016 who helly held besc Certible 1 din 545.000 parent wat deur 1, 2010, what cual ties would be books only 1, 2016 d And the $45.000 pomemade on December 31, that the offee years to be done 510.000 the other bed mary 1, 2016 Beliet te Atac Dec,2013, these for od 55,300. Prepare all Dec 31, 2018 at for the o O RI $ 0 5 4 on 5 8 R 20 T Y U O F G H J K. V B. N M M Paolo, Inc. (the lessor) entered into a sales-type lease with another company on January 1, 2016. The lease was for five years with $40,000 due at the end of each year. The cost of the equipment on Paolo's books was $140,000. Paolo uses an interest rate of 8%. Required: (Round all answers to the nearest dollar.) a b Prepare all journal entries for Paolo for the year 2016. If Paolo has mistakenly accounted for this lease as an operating lease, by how much would the company's 2016 income be overstated or understated because of this error? (Be sure to indicate under or over) Flagstaff, a lessor, entered into a sales-type lease with another company on January 1, 2016. The lease was for four years with $40,000 payments due at the end of each year. The cost of the equipment on Flagstaff's books was $120,000. Actuarial information for 7%, the implicit rate, follows: 3 Periods 4 Periods Amount of $1 1.2250 1.3108 Amount of annuity of $1 3.1249 4.4399 Present value of $1 0.8163 0.7629 Present value of annuity of $1 2.6243 3.3872 Required: a. Prepare all journal entries for Flagstaff for the year 2016. b. Use the same information as above, but assume that there is an unguaranteed residual value of $8,000. Answer the following questions: (1) What would be the charge to Cost of Asset Leased (2) What would be the charge to the initial gross receivable? (3) What would be the credit to Sales? On January 1, 2016, Fiona sold some land to another company and immediately leased it back again. The sale price was $13,420, and the leaseback requires $2,000 payments at the end of each of the next ten years. An interest rate of 8% was used. The cost of the land on Fiona's books was $10,000. The title to the land will be transferred back to Fiona at the end of the lease. Required: Prepare all 2016 journal entries on the books of Fiona. Motor City, Inc. leased equipment from Des Moines Company on January 1, 2016. Annual December 31 payments of $15.000 were required. The present value of these payments, discounted at 9% for nine years, is $89.929 (rounded). The lease is a direct financing lease. Required: Prepare all December 31, 2016, entries for Des Moines. Addison Company signs a lease agreement dated January 1, 2016 for equipment from Luke Rental Company beginning January 1, 2016. The following information relates to the capital lease: 1) The lease term is 5 years, the lease is noncancelable and requires annual payments of $25,000 to be paid in the beginning of each year. 2) The cost and fair value of the equipment is $102,561. The equipment has an estimated life of 5 years and zero residual value. 3) Addison agrees to pay all executory costs. 4) There is no renewal or bargain options 5) Luke's interest rate is implicit to the lease at 11%. Addison is aware of this rate, which is equal to its borrowing rate. 6) Addison uses the straight line method to record depreciation 7) Executory costs paid at the end of year by Addison are: 2016 2017 Insurance $1,250 Insurance $1,150 Taxes property S250 Taxes property S 225 Jan 1, 2016 $ 102,0 Jan. 1, 2016 $25,000 77,561 Dec 31, 2016 8,532 86,092 Jan 1, 2017 25,000 61,092 Dec. 31, 2017 6,720 67,813 Jan. 1. 2018 25,000 42,813 Dec. 31, 2018 4,709 47,522 Jan 1, 2019 25,000 22,522 Dec 31, 2019 2,477* 25,000 Jan 1, 2020 25,000 0 *rounded Required: Prepare the journal entries for Addison for the years 2016 and 2017 Raleigh Inc. leased some equipment from another company on January 1, 2016, for a three-year period. Payments of $45,000 were due each December 31. The lease qualified as a capital lease. Assets were depreciated over the life of the lease, using the straight-line method. The appropriate interest rate to use was 9%. a b Required: (For all answers, round to the nearest dollar.) Prepare all December 31, 2016. journal entries required on Raleigh's books. At December 31, 2016, how much of the lease liability should be shown as current? Compute two acceptable answers c If the first $45,000 payment were due January 1, 2016, what journal entries would be required on Raleigh's books on January 1, 2016? d. Assume again that the $45,000 payments are made on December 31. Assume, in addition, that at the end of three years, the lessee guaranteed a residual value of $10,000. Compute the amount of the lease obligation that should be recorded on January 1, 2016. Refer to Part d. Assume that on December 31, 2018 the leased equipment had a fair value of only $6,500. Prepare all December 31 2018. journal entries for the lessee e nud.com/cn/a/3373/ta/id/10186 D Question 1 3 pts and from the company 1, 2016. for the year period Pof $15.00 eachDecember 31 The die Auswete aginasaritaleta eartat the renterataste Red For we wo) Per Dec.2016. books At December 31, 2016 who helly held besc Certible 1 din 545.000 parent wat deur 1, 2010, what cual ties would be books only 1, 2016 d And the $45.000 pomemade on December 31, that the offee years to be done 510.000 the other bed mary 1, 2016 Beliet te Atac Dec,2013, these for od 55,300. Prepare all Dec 31, 2018 at for the o O RI $ 0 5 4 on 5 8 R 20 T Y U O F G H J K. V B. N M M Paolo, Inc. (the lessor) entered into a sales-type lease with another company on January 1, 2016. The lease was for five years with $40,000 due at the end of each year. The cost of the equipment on Paolo's books was $140,000. Paolo uses an interest rate of 8%. Required: (Round all answers to the nearest dollar.) a b Prepare all journal entries for Paolo for the year 2016. If Paolo has mistakenly accounted for this lease as an operating lease, by how much would the company's 2016 income be overstated or understated because of this error? (Be sure to indicate under or over) Flagstaff, a lessor, entered into a sales-type lease with another company on January 1, 2016. The lease was for four years with $40,000 payments due at the end of each year. The cost of the equipment on Flagstaff's books was $120,000. Actuarial information for 7%, the implicit rate, follows: 3 Periods 4 Periods Amount of $1 1.2250 1.3108 Amount of annuity of $1 3.1249 4.4399 Present value of $1 0.8163 0.7629 Present value of annuity of $1 2.6243 3.3872 Required: a. Prepare all journal entries for Flagstaff for the year 2016. b. Use the same information as above, but assume that there is an unguaranteed residual value of $8,000. Answer the following questions: (1) What would be the charge to Cost of Asset Leased (2) What would be the charge to the initial gross receivable? (3) What would be the credit to Sales? On January 1, 2016, Fiona sold some land to another company and immediately leased it back again. The sale price was $13,420, and the leaseback requires $2,000 payments at the end of each of the next ten years. An interest rate of 8% was used. The cost of the land on Fiona's books was $10,000. The title to the land will be transferred back to Fiona at the end of the lease. Required: Prepare all 2016 journal entries on the books of Fiona. Motor City, Inc. leased equipment from Des Moines Company on January 1, 2016. Annual December 31 payments of $15.000 were required. The present value of these payments, discounted at 9% for nine years, is $89.929 (rounded). The lease is a direct financing lease. Required: Prepare all December 31, 2016, entries for Des Moines. Addison Company signs a lease agreement dated January 1, 2016 for equipment from Luke Rental Company beginning January 1, 2016. The following information relates to the capital lease: 1) The lease term is 5 years, the lease is noncancelable and requires annual payments of $25,000 to be paid in the beginning of each year. 2) The cost and fair value of the equipment is $102,561. The equipment has an estimated life of 5 years and zero residual value. 3) Addison agrees to pay all executory costs. 4) There is no renewal or bargain options 5) Luke's interest rate is implicit to the lease at 11%. Addison is aware of this rate, which is equal to its borrowing rate. 6) Addison uses the straight line method to record depreciation 7) Executory costs paid at the end of year by Addison are: 2016 2017 Insurance $1,250 Insurance $1,150 Taxes property S250 Taxes property S 225 Jan 1, 2016 $ 102,0 Jan. 1, 2016 $25,000 77,561 Dec 31, 2016 8,532 86,092 Jan 1, 2017 25,000 61,092 Dec. 31, 2017 6,720 67,813 Jan. 1. 2018 25,000 42,813 Dec. 31, 2018 4,709 47,522 Jan 1, 2019 25,000 22,522 Dec 31, 2019 2,477* 25,000 Jan 1, 2020 25,000 0 *rounded Required: Prepare the journal entries for Addison for the years 2016 and 2017 Raleigh Inc. leased some equipment from another company on January 1, 2016, for a three-year period. Payments of $45,000 were due each December 31. The lease qualified as a capital lease. Assets were depreciated over the life of the lease, using the straight-line method. The appropriate interest rate to use was 9%. a b Required: (For all answers, round to the nearest dollar.) Prepare all December 31, 2016. journal entries required on Raleigh's books. At December 31, 2016, how much of the lease liability should be shown as current? Compute two acceptable answers c If the first $45,000 payment were due January 1, 2016, what journal entries would be required on Raleigh's books on January 1, 2016? d. Assume again that the $45,000 payments are made on December 31. Assume, in addition, that at the end of three years, the lessee guaranteed a residual value of $10,000. Compute the amount of the lease obligation that should be recorded on January 1, 2016. Refer to Part d. Assume that on December 31, 2018 the leased equipment had a fair value of only $6,500. Prepare all December 31 2018. journal entries for the lessee e