Please Handwrite solution
AT&T LTE 2:06 AM c @ * 30% SAMS Leasing Company agrees to lease oqeipment to Jetson Corporation on Janary 1, 2017 The following infoemation relates to the lease agreement 1. 2. The cost of the machinery is $525,000, and the fair valuc of the asset on January 1,2017 3. At the end of the lease term, the asset reverts to the lessor and has a guaranicod residua The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years is $TO0,000 value of 550,000. Jetson estimates that the expected residual value at the end of the lease term will be 550,000Jctson amortizes all of its leased oquipment on a straighi-line basis Note that because the guaranteed residual value is equal te the espected residual value, the lessee weald not include any amount of the guaranteed residual value in its cakculation of the iaitial lease liability. HOWEVER, the guaranteed resideal amount IS included in the computation for the Present Value classification test The lease agreemet requires equal annual rental payments of S109,365 beginning en January 1, 2017 (the commencement of the lease). Jetsons incremental berowing tale is 6%, and the lessor's implicit rate is unknown. 5. 6 Assume the accounting period ends on December 31 Instructions: (You may complete the entire problem, including your answer to part the jsurnal entries and posting to the t-accoents in Escel), Iwould prefer you do so. However, if you prefer to do it by hand, I'll aceept the assigement in that ferm as well. Just take a picture of your assignment and upload it to Moodle) a) Determine what type of lease this is from the perspective of the lessee. Show discuss how you made your decision. b) Compute the present value of the lease liability to the lessee. e) Prepare the lease schodule (see set up on next page) using the effective-inierest method d) Prepare the jounal entries Jetson Coporation would make for the seven years related to the lease arangement e) Pest your journal eatries to the apprepriate t-accounts Anmal Lease Reduction of Leass Date latcrest on L AT&T LTE 2:06 AM c @ * 30% SAMS Leasing Company agrees to lease oqeipment to Jetson Corporation on Janary 1, 2017 The following infoemation relates to the lease agreement 1. 2. The cost of the machinery is $525,000, and the fair valuc of the asset on January 1,2017 3. At the end of the lease term, the asset reverts to the lessor and has a guaranicod residua The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years is $TO0,000 value of 550,000. Jetson estimates that the expected residual value at the end of the lease term will be 550,000Jctson amortizes all of its leased oquipment on a straighi-line basis Note that because the guaranteed residual value is equal te the espected residual value, the lessee weald not include any amount of the guaranteed residual value in its cakculation of the iaitial lease liability. HOWEVER, the guaranteed resideal amount IS included in the computation for the Present Value classification test The lease agreemet requires equal annual rental payments of S109,365 beginning en January 1, 2017 (the commencement of the lease). Jetsons incremental berowing tale is 6%, and the lessor's implicit rate is unknown. 5. 6 Assume the accounting period ends on December 31 Instructions: (You may complete the entire problem, including your answer to part the jsurnal entries and posting to the t-accoents in Escel), Iwould prefer you do so. However, if you prefer to do it by hand, I'll aceept the assigement in that ferm as well. Just take a picture of your assignment and upload it to Moodle) a) Determine what type of lease this is from the perspective of the lessee. Show discuss how you made your decision. b) Compute the present value of the lease liability to the lessee. e) Prepare the lease schodule (see set up on next page) using the effective-inierest method d) Prepare the jounal entries Jetson Coporation would make for the seven years related to the lease arangement e) Pest your journal eatries to the apprepriate t-accounts Anmal Lease Reduction of Leass Date latcrest on L
