Review Answer (Ch. 129) - Adobe Acrobat Reader DC g Nguyen Trung 1C Marigolery & Co., A V e-law-form-provided-500-hours-time-fink - Help Intermediate Acco... x Tendai Inc. sells computer systems. Tendai leases computers to Lee Company on January 1, 2020. The manufacturing cost of the computers was $12 million. This non-cancelable lease had the following terms: Lease payments: $2,125,000 semiannually; first payment at January 1, 2020; remaining payments at June 30 and December 31 each year through June 30, 2022. Lease term: 3 years (6 semi-annual payments) No residual value; no bargain purchase option Economic life of equipment: 5 years Implicit interest rate and lessee's incremental borrowing rate: 5% semi-annually Fair value of the computers at January 1, 2020: $20 million Collectability of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred. There is no transfer of ownership stipulation. Page 2 UUSUN and answers/montgomery.co.well-established-law firm provided. So hour. de Core20205PM Dong Tin Nguyen Tun M G A X Intermediate Accounting Review Answer Ch. 121 - Adobe Acrobat Reader DC File Edit View Window Help Home Tools Intermediate Acco. * 3. (5 points) Tendai would account for this as: A. A capital lease. B. A direct financing lease. C. A sales type lease. D. An operating lease. 4. (5 points) Lee Company would account for this as: A. A capital lease. B. A direct financing lease. C. A sales type lease. D. An operating lease. 5. (Extra Credit 5 points) What is the net carrying value of the lease liability in Lee's June 30, 2020 balance sheet, if any? (if not, write "0") O Type here to search 0 Bi H Secure https://www.chegg.com/homework help/questions and answers/montgomery.co.well established-low-firm.provided.500 hour C 200 Dang Th Nguyen Tu Montgomery CO AVX Intermediate Accounting Review Answech 123 - Adobe Acrobat Reader DC File Edit View Window Help Home Tools Intermediate Acco. * .com 6. (5 points) What is the net amount that Tendai would report on this lease in its 2020 income statement? Page 3 Bunker Hill Community College Review Answer (Ch. 129) - Adobe Acrobat Reader DC g Nguyen Trung 1C Marigolery & Co., A V e-law-form-provided-500-hours-time-fink - Help Intermediate Acco... x Tendai Inc. sells computer systems. Tendai leases computers to Lee Company on January 1, 2020. The manufacturing cost of the computers was $12 million. This non-cancelable lease had the following terms: Lease payments: $2,125,000 semiannually; first payment at January 1, 2020; remaining payments at June 30 and December 31 each year through June 30, 2022. Lease term: 3 years (6 semi-annual payments) No residual value; no bargain purchase option Economic life of equipment: 5 years Implicit interest rate and lessee's incremental borrowing rate: 5% semi-annually Fair value of the computers at January 1, 2020: $20 million Collectability of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred. There is no transfer of ownership stipulation. Page 2 UUSUN and answers/montgomery.co.well-established-law firm provided. So hour. de Core20205PM Dong Tin Nguyen Tun M G A X Intermediate Accounting Review Answer Ch. 121 - Adobe Acrobat Reader DC File Edit View Window Help Home Tools Intermediate Acco. * 3. (5 points) Tendai would account for this as: A. A capital lease. B. A direct financing lease. C. A sales type lease. D. An operating lease. 4. (5 points) Lee Company would account for this as: A. A capital lease. B. A direct financing lease. C. A sales type lease. D. An operating lease. 5. (Extra Credit 5 points) What is the net carrying value of the lease liability in Lee's June 30, 2020 balance sheet, if any? (if not, write "0") O Type here to search 0 Bi H Secure https://www.chegg.com/homework help/questions and answers/montgomery.co.well established-low-firm.provided.500 hour C 200 Dang Th Nguyen Tu Montgomery CO AVX Intermediate Accounting Review Answech 123 - Adobe Acrobat Reader DC File Edit View Window Help Home Tools Intermediate Acco. * .com 6. (5 points) What is the net amount that Tendai would report on this lease in its 2020 income statement? Page 3 Bunker Hill Community College
