Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Technoid Inc. sells computer systems. computers was $12 million. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the

image text in transcribed
image text in transcribed
Technoid Inc. sells computer systems. computers was $12 million. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the This noncancelable lease had the following terms Lease payments: $2.466.754 semiannually, first payment at January 1,2018, remaining payments at June 30 through June 30, 2022 Lease term: five years (10 semiannual payments) No residual value, no purchase option. Economic life of equipment five years Implicit interest rate and lessee's incremental borrowing rate 5% semiannually Fair value of the computers at January 1, 2018: $20 million $2.466.754 semiannualy, first payment at January 1 1.2018, remaining payments at June 30 and December 31 each year r Technold would account for this as: A sales-type lease without selling profit. An operating lease. A finance lease. A sales-type lease with selling profit

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

Mileage Log Book

Authors: Easy Mileage Log Books

1st Edition

B0BS8SJQZH, 979-8716491571

More Books

Students also viewed these Accounting questions