Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Oriole Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $87.000. Under the 3-year,

image text in transcribed

image text in transcribed

image text in transcribed

Oriole Leasing Company leases a new machine to Sharrer Corporation. The machine has a cost of $65,000 and fair value of $87.000. Under the 3-year, non-cancelable contract. Sharrer will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1.2020. Oriole expects to earn an 8% return on its investment, and this implicitrate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2020. Click here to view factor tables. Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to decimal places eg. 5,275.) Rent Receipt/Payment Interest Revenue/Expense Reduction of Principal Receivable/Liability Date 1/1/20 $ 12/31/20 12/31/21 12/31/22 e Textbook and Media Prepare the journal entry at commencement of the lease for Oriole. (Credit account titles are automatically indented when amount is entered. Do not Indendo Date Account Titles and Explanation Debit Credit 1/1/20 e Textbook and Media List of Accounts Prepare the journal entry at commencement of the lease for Sharrer. (Credit account titles are automaticaly Indented when amount is entered. Do notIndent manual Debit Credit Date Account Titles and Explanation 1/1/20 e Textbook and Media List of Accounts Prepare the journal entry at commencement of the lease for Sharrer. (Credit account titles are automatically indented when amount is entered. Do not indent manually Date Account Titles and Explanation Debit Credit 1/1/20 eTextbook and Media List of Accounts Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Oriole's implicit rate Sharrer's incremental borrowing rate is 9 and 121 Sharrer incurs initial direct costs $9.500. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to del places eg. 5.275.) Date Account Titles and Explanation 1/1/20

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

Step: 3

blur-text-image

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

Authors: Anne Britton, Chris Waterston

4th Edition

0273703609, 978-0273703600

More Books

Students also viewed these Accounting questions

Question

What do you think is likely to be Liams problem? Discuss.

Answered: 1 week ago

Question

What laws were passed because of domestic violence?

Answered: 1 week ago