Question 1 Pharoah Leasing Company signs a lease agreement on January 1, 2017, to ease electronic equipment to Novak Company. The term or the noncancelable fease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Novak Company has the option to purchase the equipment for $16,900 upon termination of the lease 2. The equipment as a cost and feir value of $160,000 to Pharoah Leasing Company. The useful economic life is 2 years, with a salvage value of $15,000 3. Novak Company is required to pay $5,400 each year to the lessor for executory costs 4. Pharoan Leasing Company desires to earn a return of 10% on its investment 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor Click here to view factor tabs (a) Prepare the journal entries on the books or Pharoah Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2011. (Credit account tities are automatically indented when amount is entered. Do not indent manually. If ne entry is required, select "No Entry for the account thes and enter for the amounts. Round present value factor calculations to 5 decimal places, ..0.527552 and the final answers to decimal places ... 5.275.) Table 6.1 FUTURE VALUE OF 1 (FUTURE VALUE OF A SINGLE SUM) FVF, = (1 + 1)" (n) Periods 2% 292% 3% 4% 5% 6% 1 1.02000 1.02500 1.03000 1.04000 1.05000 1.06000 2 1.04040 1.05063 1.06090 1.08160 1.10250 1.12360 3 1.06121 1.07689 1.09273 1.12486 1.15763 1.19102 4 1.08243 1.10381 1.12551 1.16986 1.21551 1.26248 5 La 1.10408 1.13141 1.15927 1.21665 1.27628 1.33823 6 1.12616 1.15969 1.19405 1.26532 1.34010 1.41852 7 1.14869 1.18869 1.22987 1.31593 1.40710 1.50363 8 1.17166 1.21840 1.26677 1.36857 1.47746 1.59385 9 1.19509 1.24886 1.30477 1.42331 1.55133 1.68948 10 1.21899 1.28008 1.34392 1.48024 1.62889 1.79085 11 1 24237 1 21909 1 28423 152045 1 71024 1 ROR 11 1.24337 1.31209 1.38423 1.53945 1.71034 1.89830 12 1.26824 1.34489 1.42576 1.60103 1.79586 2.01220 13 1.29361 1.37851 1.46853 1.66507 1.88565 2.13293 14 1.31948 1.41297 1.51259 1.73168 1.97993 2.26090 15 1.34587 1.44830 1.55797 1.80094 2.07893 2.39656 16 1.37279 1.48451 1.60471 1.87298 2.18287 2.54035 17 1.40024 1.52162 1.65285 1.94790 2.29202 2.69277 18 1.42825 1.55966 1.70243 2.02582 2.40662 2.85434 19 1.45681 1.59865 1.75351 2.10685 2.52695 3.02560 20 1.48595 1.63862 1.80611 2.19112 2.65330 3.20714 21 1.51567 1.67958 1.86029 2.27877 2.78596 3.39956 22 1.54598 1.72157 1.91610 2.36992 2.92526 3.60354 23 1.57690 1.76461 1.97359 2.46472 3.07152 3.81975 14 1 r. + 3 . CLOSE 24 1.6084 1.80873 2.03279 2.56330 3.22510 4.04893 25 1.64061 1.85394 2.09378 2.66584 3.38635 429187 26 167342 1.90029 215659 2.77247 3.55567 45498 27 170689 194780 222129 2.88337 3.73346 4.82235 28 174102 199650 228793 299870 392013 5.11169 29 1.77584 2.04641 235657311865 411614 5.41839 30 181136 2.09757 2.42726 3.24340 4.32194 574349 31 184759 215001 250008 337313 457804 608810 32 1.88454 220376 2.57508 3.50806 476494 6.45339 33 192223 2.25885 2.65234 364838 5.00319 6.84059 34 1.96068 231532 2.731913.79432 5.25335 725103 35 199999 237321 2.81386 394609 551602 7. 68609 36 203989 243254 2.89828 4.10393 5.79182 814725 16 | 18 37 2.08069 2.49335 2.98523 4.26809 6.08141 8.63609 38 2.12230 2.55568 3.07478 4.43881 6.38548 9.15425 39 2.16474 2.61957 3.16703 4.61637 6.70475 9.70351 40 2.20804 2.68506 3.26204 4.80102 7.03999 10.28572 8% 9% 10% 11% 12% 15% (n) Periods 1.08000 1.09000 1.10000 1.11000 1.12000 1.15000 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250 2 E 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088 3 4 1.36049 1.41158 1.46410 1.51807 1.57352 1.74901 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136 un 5 1.58687 167710 1.77156 1.87041 1.97382 2.31306 6 1.71382 1.82804 1.94872 2.07616 2.21068 2.66002 7 1.85093 1.99256 2.14359 2.30454 2.47596 3.05902 8 2.71962 3.06581 3.45227 3.88328 4.36349 6.15279 13 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 14 3.17217 3.64248 4.17725 4.78459 5.47357 8.13706 15 3.42594 3.97031 4.59497 5.31089 6.13039 9.35762 16 3.70002 4.32763 5.05447 5.89509 6.86604 10.76126 17 3.99602 4.71712 5.55992 6.54355 7.68997 12.37545 18 4.31570 5.14166 6.11591 7.26334 8.61276 14.23177 19 4.66096 5.60441 6.72750 8.06231 9.64629 E 16.36654 20 5.03383 6.10881 7.40025 8.94917 10.80335 18.82152 21 5.43654 6.65860 8.14028 9.93357 12.10031 21.64475 22 5.87146 7.257878.95430 11.02627 13.55235 24.89146 23 6.34118 7.91108 9.84973 12.23916 15.1786328.62518 24 6.84847 8.62308 10.83471 13.58546 17.00000 32.91895 25 729635 939916 11 91RIR 15.0798619 007 37 RSR 36 (n) Periods 2% 299% 3% 4% 5% 6% 1 98039 97561 9708796154 95238 .94340 2 96117 95181 9426092456 90703 .89000 3 94232 92860 91514 88900 86384 83962 4 .92385 90595 88849.85480_82270 79209 5 .90573.88385 8626182193 78353 .74726 6 .88797 8623083748 7903174622 .70496 7 87056 84127.81309 75992_71068 .66506 CO .85349.8207578941 7306967684 62741 9 .83676 80073.76642 7025964461 :59190 10 .82035 781207440967556 61391 55839 11 .80426 76214 .7224264958 58468 152679 12 .7884974356 70138.62460 55684 49697 8% 9% 10% 11% 12% 15% (n) Periods .92593 91743 90909 90090 89286 86957 1 .85734 84168 .82645 81162 79719 75614 2 79383 77218 7513273119.71178 65752 3 .73503 70843 .68301.65873 63552 57175 4 -68058 64993 .62092 5934556743 49718 5 .63017 596275644753464 50663 43233 6 .5834954703 51316 48166 45235 37594 7 .54027 50187 46651 43393 40388 32690 8 .5002546043.42410 3909236061 28426 9 46319 4224138554 35218 32197 24719 10 42888 38753 35049 31728 28748 21494 11 -39711 35554 31863 28584 25668 18691 12 Question 1 Pharoah Leasing Company signs a lease agreement on January 1, 2017, to ease electronic equipment to Novak Company. The term or the noncancelable fease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Novak Company has the option to purchase the equipment for $16,900 upon termination of the lease 2. The equipment as a cost and feir value of $160,000 to Pharoah Leasing Company. The useful economic life is 2 years, with a salvage value of $15,000 3. Novak Company is required to pay $5,400 each year to the lessor for executory costs 4. Pharoan Leasing Company desires to earn a return of 10% on its investment 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor Click here to view factor tabs (a) Prepare the journal entries on the books or Pharoah Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2011. (Credit account tities are automatically indented when amount is entered. Do not indent manually. If ne entry is required, select "No Entry for the account thes and enter for the amounts. Round present value factor calculations to 5 decimal places, ..0.527552 and the final answers to decimal places ... 5.275.) Table 6.1 FUTURE VALUE OF 1 (FUTURE VALUE OF A SINGLE SUM) FVF, = (1 + 1)" (n) Periods 2% 292% 3% 4% 5% 6% 1 1.02000 1.02500 1.03000 1.04000 1.05000 1.06000 2 1.04040 1.05063 1.06090 1.08160 1.10250 1.12360 3 1.06121 1.07689 1.09273 1.12486 1.15763 1.19102 4 1.08243 1.10381 1.12551 1.16986 1.21551 1.26248 5 La 1.10408 1.13141 1.15927 1.21665 1.27628 1.33823 6 1.12616 1.15969 1.19405 1.26532 1.34010 1.41852 7 1.14869 1.18869 1.22987 1.31593 1.40710 1.50363 8 1.17166 1.21840 1.26677 1.36857 1.47746 1.59385 9 1.19509 1.24886 1.30477 1.42331 1.55133 1.68948 10 1.21899 1.28008 1.34392 1.48024 1.62889 1.79085 11 1 24237 1 21909 1 28423 152045 1 71024 1 ROR 11 1.24337 1.31209 1.38423 1.53945 1.71034 1.89830 12 1.26824 1.34489 1.42576 1.60103 1.79586 2.01220 13 1.29361 1.37851 1.46853 1.66507 1.88565 2.13293 14 1.31948 1.41297 1.51259 1.73168 1.97993 2.26090 15 1.34587 1.44830 1.55797 1.80094 2.07893 2.39656 16 1.37279 1.48451 1.60471 1.87298 2.18287 2.54035 17 1.40024 1.52162 1.65285 1.94790 2.29202 2.69277 18 1.42825 1.55966 1.70243 2.02582 2.40662 2.85434 19 1.45681 1.59865 1.75351 2.10685 2.52695 3.02560 20 1.48595 1.63862 1.80611 2.19112 2.65330 3.20714 21 1.51567 1.67958 1.86029 2.27877 2.78596 3.39956 22 1.54598 1.72157 1.91610 2.36992 2.92526 3.60354 23 1.57690 1.76461 1.97359 2.46472 3.07152 3.81975 14 1 r. + 3 . CLOSE 24 1.6084 1.80873 2.03279 2.56330 3.22510 4.04893 25 1.64061 1.85394 2.09378 2.66584 3.38635 429187 26 167342 1.90029 215659 2.77247 3.55567 45498 27 170689 194780 222129 2.88337 3.73346 4.82235 28 174102 199650 228793 299870 392013 5.11169 29 1.77584 2.04641 235657311865 411614 5.41839 30 181136 2.09757 2.42726 3.24340 4.32194 574349 31 184759 215001 250008 337313 457804 608810 32 1.88454 220376 2.57508 3.50806 476494 6.45339 33 192223 2.25885 2.65234 364838 5.00319 6.84059 34 1.96068 231532 2.731913.79432 5.25335 725103 35 199999 237321 2.81386 394609 551602 7. 68609 36 203989 243254 2.89828 4.10393 5.79182 814725 16 | 18 37 2.08069 2.49335 2.98523 4.26809 6.08141 8.63609 38 2.12230 2.55568 3.07478 4.43881 6.38548 9.15425 39 2.16474 2.61957 3.16703 4.61637 6.70475 9.70351 40 2.20804 2.68506 3.26204 4.80102 7.03999 10.28572 8% 9% 10% 11% 12% 15% (n) Periods 1.08000 1.09000 1.10000 1.11000 1.12000 1.15000 1.16640 1.18810 1.21000 1.23210 1.25440 1.32250 2 E 1.25971 1.29503 1.33100 1.36763 1.40493 1.52088 3 4 1.36049 1.41158 1.46410 1.51807 1.57352 1.74901 1.46933 1.53862 1.61051 1.68506 1.76234 2.01136 un 5 1.58687 167710 1.77156 1.87041 1.97382 2.31306 6 1.71382 1.82804 1.94872 2.07616 2.21068 2.66002 7 1.85093 1.99256 2.14359 2.30454 2.47596 3.05902 8 2.71962 3.06581 3.45227 3.88328 4.36349 6.15279 13 2.93719 3.34173 3.79750 4.31044 4.88711 7.07571 14 3.17217 3.64248 4.17725 4.78459 5.47357 8.13706 15 3.42594 3.97031 4.59497 5.31089 6.13039 9.35762 16 3.70002 4.32763 5.05447 5.89509 6.86604 10.76126 17 3.99602 4.71712 5.55992 6.54355 7.68997 12.37545 18 4.31570 5.14166 6.11591 7.26334 8.61276 14.23177 19 4.66096 5.60441 6.72750 8.06231 9.64629 E 16.36654 20 5.03383 6.10881 7.40025 8.94917 10.80335 18.82152 21 5.43654 6.65860 8.14028 9.93357 12.10031 21.64475 22 5.87146 7.257878.95430 11.02627 13.55235 24.89146 23 6.34118 7.91108 9.84973 12.23916 15.1786328.62518 24 6.84847 8.62308 10.83471 13.58546 17.00000 32.91895 25 729635 939916 11 91RIR 15.0798619 007 37 RSR 36 (n) Periods 2% 299% 3% 4% 5% 6% 1 98039 97561 9708796154 95238 .94340 2 96117 95181 9426092456 90703 .89000 3 94232 92860 91514 88900 86384 83962 4 .92385 90595 88849.85480_82270 79209 5 .90573.88385 8626182193 78353 .74726 6 .88797 8623083748 7903174622 .70496 7 87056 84127.81309 75992_71068 .66506 CO .85349.8207578941 7306967684 62741 9 .83676 80073.76642 7025964461 :59190 10 .82035 781207440967556 61391 55839 11 .80426 76214 .7224264958 58468 152679 12 .7884974356 70138.62460 55684 49697 8% 9% 10% 11% 12% 15% (n) Periods .92593 91743 90909 90090 89286 86957 1 .85734 84168 .82645 81162 79719 75614 2 79383 77218 7513273119.71178 65752 3 .73503 70843 .68301.65873 63552 57175 4 -68058 64993 .62092 5934556743 49718 5 .63017 596275644753464 50663 43233 6 .5834954703 51316 48166 45235 37594 7 .54027 50187 46651 43393 40388 32690 8 .5002546043.42410 3909236061 28426 9 46319 4224138554 35218 32197 24719 10 42888 38753 35049 31728 28748 21494 11 -39711 35554 31863 28584 25668 18691 12