Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show work if possible Current Attempt in Progress Shamrock Corporation leases a building to Pharoah, Inc. on January 1, 2020. The following facts pertain

image text in transcribed

image text in transcribed

image text in transcribed

Please show work if possible

Current Attempt in Progress Shamrock Corporation leases a building to Pharoah, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 10 years with equal annual rental payments of $3,532 at the end of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $34,700, a book value to Shamrock of $22,600, and a useful life of 15 years. 4. At the end of the lease term, Shamrock and Pharoah expect the residual value of the building to be $12,100, and this amount is guaranteed by Money, Inc., a third party. 5. Shamrock wants to earn a 5% return on the lease, and collectibility of the payments is probable. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided) 0.5/2 Assume the present value of lease payments and third-party guarantee is $34,700 and the rate of return to amortize the net lease receivable to zero is 13.12%. Prepare the amortization sche Shamrock would use to amortize the net lease receivable to zero. (Round answers to 0 decimal places, e.g. 5,275.) SHAMROCK CORPORATION (Lessor) Lease Amortization Schedule Sales-Type Lease Annual Lease Payment Date Interest on Lease Receivable Recovery of Lease Receivable Lease Receivable 1/1/20 $ $ $ $ 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 o . Type here to search J. Rain coming Tee 12.05 4/13/2 T2/31/22 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 12/31/30 TA $ $ ta $

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

A Guide To Local Environmental Auditing

Authors: Hugh Barton; Noel Bruder

1st Edition

1853832340, 9781853832345

More Books

Students also viewed these Accounting questions

Question

What are the three sources of disability income?

Answered: 1 week ago