View Policies Current Attempt in Progress Sheridan Leasing Limited, which has a fiscal year end of October 31 and follows IFRS 16, signs an agreement on January 1, 2020, to lease equipment to Irvine Limited. The following information relates to the agreement. 1. 2. The term of the non-cancellable lease is six years, with no renewal option. The equipment has an estimated economic life of eight years. The asset's cost to Sheridan, the lessor, is $316,000. The asset's fair value at January 1, 2020, is $316,000, The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $45,384, which is not guaranteed. 3. 4. Irvine Limited, the lessee, assumes direct responsibility for all executory costs. 5. The agreement requires equal annual rental payments, beginning on January 1, 2020. Collectibility of the lease payments is reasonably predictable. There are no important uncertainties about costs that have not yet been incurred by the lesson 6. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Assuming that Sheridan Leasing desires a 9% rate of return on its investment, use time value of money tables, a financial calculator, or Excel functions to calculate the amount of the annual rental payment that is required, (Round factor values to 5 decimal places, eg. 1.25124 and final answer to decimal places, es. 5,275.) Annual rental payment $ e Textbook and Media List of Accounts Prepare an amortization schedule using a spreadsheet that would be suitable for the lessor for the lease term. (Round answers to 0 decimal places, eg. 5,275) Sheridan Leasing Corporation (Lessor) Lease Amortization Schedule Interest Annual Lease Payment LLLL Net Investment on Net Balance of Net and Sheridan Leasing Corporation (Lessor) Lease Amortization Schedule Annual Lease Payment Date Plus URV Interest on Net Investment Net Investment Recovery Balance of Net Investment 1/1/20 1/1/20 $ $ 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 IN 12/31/25 $ $ $ Prepare all of the journal entries for the lessor for 2020 and 2021 to record the lease agreement, the receipt of lease payments, and the recognition of income. Assume that Sheridan prepares adjusting journal entries only at the end of the fiscal year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to decimal places, eg. 5,275) Date Account Titles and Explanation Debit Credit 1/1/20 (To record inception of lease and collection of lease payment.) (To record interest.) TI (To record inception of lease and collection of lease payment.) (To record interest.) LE (Collection of lease payment.) (To record interest.) e Textbook and Media Prepare a comparative partial statement of income for Sheridan for fiscal years 2020 and 2021. Sheridan Leasing Limited Statement of Income (partial) For the Year Ended October 31, 2021 2020 e Textbook and Media List of Accounts Si for later Attempts: unlimited Submit
