20 Jun Acc422 Final Exam
Exercise 21-8 (Part Level Submission)
The following facts pertain to a noncancelable lease agreement between Windsor Leasing Company and Sheridan Company, a lessee.
Inception date: May 1, 2017
Annual lease payment due at the beginning of
each year, beginning with May 1, 2017 $21,737.01
Bargain-purchase option price at end of lease term $3,800
Lease term 5 years
Economic life of leased equipment 10 years
Lessor’s cost $68,000
Fair value of asset at May 1, 2017 $93,000
Lessor’s implicit rate 10 %
Lessee’s incremental borrowing rate 10 %
The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs.
Click here to view factor tables
Collapse question part
(c)
Partially correct answer. Your answer is partially correct. Try again.
Prepare a lease amortization schedule for Sheridan Company for the 5-year lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25125 and Round answers to 2 decimal places, e.g. 15.25.)
SHERIDAN COMPANY (Lessee)
Lease Amortization Schedule
Date
Annual Lease Payment Plus
BPO
Interest on
Liability
Reduction of Lease
Liability
Lease Liability
5/1/17
$
Entry field with correct answer
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
(To record depreciation.)
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
(To record interest.)
1/1/18
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
(To record second payament.)
Question 27
Pearl Corporation manufactures replicators. On January 1, 2017, it leased to Althaus Company a replicator that had cost $100,000 to manufacture. The lease agreement covers the 5-year useful life of the replicator and requires 5 equal annual rentals of $40,200 payable each January 1, beginning January 1, 2017. An interest rate of 12% is implicit in the lease agreement. Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs.
Prepare Pearl’s January 1, 2017, journal entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)
Click here to view factor tables
Date
Account Titles and Explanation
Debit
Credit
January 1, 2017
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
(To record the lease.)
January 1, 2017
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
(To record cost.)
January 1, 2017
[removed]
[removed]
[removed]
[removed]
[removed]
[removed]
(To record first lease payment.)
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.