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please answer last question fully as half of the picture is missing but it is asking for without guaranteed residual Oakridge Leasing Corporation signs an
please answer last question fully as half of the picture is missing but it is asking for without guaranteed residual
Oakridge Leasing Corporation signs an agreement on January 1, 2020, to lease equipment to Crane Limited. Oakridge and Crane follow ASPE. The following information relates to the agreement. 1. 2. 3. 4. The term of the non-cancellable lease is five years, with no renewal option. The equipment has an estimated economic life of six years. The asset's fair value at January 1, 2020, is $87,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $6,200, which is guaranteed. Crane Limited assumes direct responsibility for all executory costs, which include the following annual amounts: $980 to Rocky Mountain Insurance Ltd. for insurance and $1,690 to James Township for property taxes. The agreement requires equal annual rental payments of $21,043 to Oakridge, the lessor, beginning on January 1, 2020. The lessee's incremental borrowing rate is 14%. The lessor's implicit rate is 13% and is known to the lessee. Crane Limited uses the straight-line depreciation method for all equipment. Crane uses reversing entries when appropriate. 5. 6. 7. 8. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Calculate the PV of the future minimum lease payments using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel functions. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 1,452.) Present Value $ e Textbook and Media List of Accounts Prepare an amortization schedule for Crane Limited for the lease term. Use Excel. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round factor values to 5 decimal places, eg. 1.25124 and final answers to decimal places, e.g. 1,452.) ane Limited (Lessee) ase Amortization Schedule Annual Lease Payment Interest on Unpaid Obligation Reduction of Lease Obligation ite Balance of Lease Obligation $ 1/20 1/20 $ $ 1/21 1/22 1/23 1/24 1/25 $ $ $ e Textbook and Media List of Accounts Prepare all of Crane's journal entries for 2020 to record the lease agreement and the lease payments. LeBland's accounting period ends on December 31. Ignore payments of insurance and property taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to decimal places, eg. 5,275.) Debit Credit Date Account Titles and Explanation 1/1/20 (To record inception of lease and first lease payment.) 12/31/20 (To record interest.) (To record depreciation expense.) eTextbook and Media List of Accounts Prepare a schedule contrasting the journal entries prepared in part (c) with those using an unguaranteed residual value of $6,200. Ignore payments of insurance and property taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to decimal places, eg. 5,275.) Guaranteed Residual Value Unguara Account Titles and Explanation Debit Credit Capitalization of lease 1/1/20: End of year 31/12/20: (To record interest expense.) (To record depreciation.) eTextbook and Media List of AccountsStep by Step Solution
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