Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following facts pertain to a non-cancelable lease agreement between Oriole Leasing Company and Sage Hill Company, a lessee. Commencement date May 1, 2020 Annual
The following facts pertain to a non-cancelable lease agreement between Oriole Leasing Company and Sage Hill Company, a lessee. Commencement date May 1, 2020 Annual lease payment due at the beginning of each year, beginning with May 1, 2020 $19,656.69 Bargain purchase option price at end of lease term $7,000 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $65,000 Fair value of asset at May 1, 2020 $93,000 Lessor's implicit rate 6 % Lessee's incremental borrowing rate 6 % The collectibility of the lease payments by Oriole is probable. SAGE HILL COMPANY (Lessee) Lease Amortization Schedule Annual Lease Payment Plus BPO Interest on Liability Reduction of Lease Liability Date 5/1/20 $ i $ $ $ 5/1/20 19656.69 19656.69 5/1/21 19656.69 4400.60 15256.09 5/1/22 19656.69 3485.23 16171.46 5/1/23 19656.69 2514.95 17141.74 5/1/24 19656.69 1486.44 18170.25 4/30/25 7000 396.23 6603.77 105283.45 $ 12283.44 $ 93000.01 answers to 2 decimal places, e.g. 5,275.15. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 5/1/20 (To record the lease) (To record the first lease payment) (To record interest expense) (To record amortization of the right-of-use asset) (To record interest expense) (To record interest expense) (To record amortization of the right-of-use asset)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started