On January 1,2021, Benjamin Company leased equipment from Delta Manufacturer under a three-year lease agreement. The lease agreement specified annual payments of $60,000 beginning January 1. 2021, the beginning of the lease, and on each December 31 thereafter through 2022. On December 31, 2023, the equipment was reverted back to Delta. The equipment was manufactured by Delta at a cost of $150,996 and was expected to have a useful life of three years with no salvage value at the end of its life. The fair value of equipment is at \$1eo nne nnt was manke an 8% metum nn its lease contract. which is known by Benjamin. (Do not add dollar sign; do not add comma by yourserr to your amnum, wun id the answer to the whole number; use minus sign if the amount is negative) Answer the following questions: 1. Assume the lease is classified as a finance lease/sales-type lease a. What is the amount related to the lease that Benjamin will report in its income statement for the year ended December 31, 2021? (lgnore income taxes.) [a] b. What is the balance of lease liability that Benjamin will report in its balance sheet at December 31, 2021 ? [b] c. What is the balance of right-of-use asset that Benjamin will report in its balance sheet at December 31, 2021? [c] d. What is the amount related to the bonds that Benjamin will report in its statement of cash flows for the year ended December 31,2021 ? Indicate the category in which to classify cash flows. [d] activities at [e] (amount), [f] activities [g] (amount) e. Assume Delta incurred $860 of legal fees for the lease execution. What is the amount related to the lease that Dolta will report in its income statement for the year ended December 31,2021 ? [h] 2. Assume the equipment has useful life of 5 years (not 3 years) with no residual value. The fair value of equipment is $220,000 (not $166,996 ). Lease term is still 3 years and annual lease payment is still $60,000 beginning January 1,2021 , and on each December 31 thereafter through 2022 . The lease is now classifiled as an operating lease. What is the balance of right-of-use usset that Beniamin will report in its balance sheet at December 31, 2021 ? [1] On January 1,2021, Benjamin Company leased equipment from Delta Manufacturer under a three-year lease agreement. The lease agreement specified annual payments of $60,000 beginning January 1. 2021, the beginning of the lease, and on each December 31 thereafter through 2022. On December 31, 2023, the equipment was reverted back to Delta. The equipment was manufactured by Delta at a cost of $150,996 and was expected to have a useful life of three years with no salvage value at the end of its life. The fair value of equipment is at \$1eo nne nnt was manke an 8% metum nn its lease contract. which is known by Benjamin. (Do not add dollar sign; do not add comma by yourserr to your amnum, wun id the answer to the whole number; use minus sign if the amount is negative) Answer the following questions: 1. Assume the lease is classified as a finance lease/sales-type lease a. What is the amount related to the lease that Benjamin will report in its income statement for the year ended December 31, 2021? (lgnore income taxes.) [a] b. What is the balance of lease liability that Benjamin will report in its balance sheet at December 31, 2021 ? [b] c. What is the balance of right-of-use asset that Benjamin will report in its balance sheet at December 31, 2021? [c] d. What is the amount related to the bonds that Benjamin will report in its statement of cash flows for the year ended December 31,2021 ? Indicate the category in which to classify cash flows. [d] activities at [e] (amount), [f] activities [g] (amount) e. Assume Delta incurred $860 of legal fees for the lease execution. What is the amount related to the lease that Dolta will report in its income statement for the year ended December 31,2021 ? [h] 2. Assume the equipment has useful life of 5 years (not 3 years) with no residual value. The fair value of equipment is $220,000 (not $166,996 ). Lease term is still 3 years and annual lease payment is still $60,000 beginning January 1,2021 , and on each December 31 thereafter through 2022 . The lease is now classifiled as an operating lease. What is the balance of right-of-use usset that Beniamin will report in its balance sheet at December 31, 2021 ? [1]
