This is a capital lease. What dollar amount will JK capitalize for this lease on 1/1/2010(before the required 1/1/2010 payment is made)?

Question 16 options:

	$83,092
	$80,025
	$82,023
	$86,263

This is a sales-type lease to lessor because:

Question 17 options:

	The present value of the minimum lease payments is bigger than 90% of the fair value of the leased property
	The collectibility of the payments is reasonably predictable and lessor's performance is complete.
	The fair value of the leased asset is bigger than the book value of the leased asset on lessor's book.
	All of the above.

To capitalize this lease transaction, lessee should

Question 18 options:

	Debit an asset account and credit a liability account.
	Debit an asset account and credit a shareholders' equity account.
	Debit a liability account and credit an asset account.
	Debit a shareholders' equity account and credit an asset account.

On December 31, 2014, the carrying value of the lease liability on lessee's book should be

Question 19 options:

	$1,500
	$12,800
	$45,608
	$0

The net leased equipment reported on lessee's book on December 31, 2010 should be

Question 20 options:

	$73,596
	$55,600
	$65,620
	$74,852

The balance of the interest payable account related to this lease transaction on lessee's balance sheet on December 31, 2010 should be

Question 21 options:

	$6,202
	$6,802
	$6,603
	$6,753

The reported non-current portion of the lease liability related to this lease transaction on lessee's balance sheet on December 31, 2010 should be

Question 22 options:

	$50,227
	$56,832
	$57,136
	$55,675

The reported interest expense related to this lease transaction on lessee's 2011 income statement should be

Question 23 options:

	$5,765
	$5,524
	$5,023
	$5,633

The current portion of the lease liability related to this lease transaction on lessee's 2011 balance sheet should be

Question 24 options:

	$12,655
	$12,785
	$12,761
	$12,977

The reduction of the lease liability related to this lease transaction on lessee's 2011 cash flow statement should be

Question 25 options:

	($11,798)
	($10,713)
	($10,822)
	($11,628)

The following facts pertain to a noncancelable lease between JK Co. and Lessor Inc 1/1/2010 $18,000 Inception date Annual lease payment due each January 1, beginning with January 1, 2010 (excluding executory costs) Lease term (years) Economic life of equipment (years) Book value (equal to cost) of the equipment to lessor Fair value of the equipment on January 1, 2010 Expected residual value of equipment at end of lease term (guaranteed by JK) Lessee's incremental borrowing rate Lessor's implicit interest rate Annual executory costs are paid by lessee at the beginning of year $75,000 $85,000 $8,000 10% 12% $2,000 The equipment reverts back to lessor at the end of the lease term. JK has never had any problems paying its bills as they come due. Lessor provides no ongoing services under the lease. Use straight-line method for depreciation