At the beginning of the current year, an entity leased a building from a lessor with the following pertinent information What is the cost of the right of use asset?
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At the beginning of the current year, an entity leased a building from a lessor with the following pertinent information
What is the cost of the right of use asset?
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- At the beginning of current year, an entity leased an equipment from a lessor with the following pertinent information: Annual rental payable at the end of each year 1,000,000 Initial direct cost paid 400,000 Lease bonus paid to lessor before commencement of the lease 300,000 Lease incentive received 100.000 Discounted amount of restoring building as required by contract 700,000 Leasehold improvement 200,000 Purchase option that is reasonably certain to be exercised 500,000 Lease term 5 years Useful life of equipment…At the beginning of current year, an entity sold building with remaining useful life of 25 years and immediately leased it back for 5 years. Sale price at fair value 20,000,000 Carrying amount of building 24,000,000 Annual rental payable at the end of each year 1,000,000 Implicit interest rate 12% Present value of an ordinary annuity of 1 at 12% for 5 periods 3.60 What is the cost of right of use asset? What is annual depreciation of the right of use asset? What is the loss on right transferred? What amount of net rental income should be reported by the lessor?At the beginning of current year, Panorama Company leased a building form a lessor with the following pertinent information Annual rental payable at the end of each year 1,000,000 Initial direct cost paid 400,000 Lease incentive received 100,000 Leasehold improvement 200,000 Purchase option that is reasonably certain to be exercised 500,000 Lease term 5 years Useful life of building 8 years Implicit interest rate 10% PV of an ordinary annuity of 1 for 5 periods at 10% 3.79 Present value of 1 for 5 periods at 10% 0.62 1. What is the cost of the right of use asset? a. 4,500,000 b. 4,400,000 c. 4,700,000 d. 4,600,000 2. What is the depreciation for current year? a. 880,000 b. 900,000 c. 550,000 d. 575,000 3. What is the interest expense for current year? a. 410,000 b. 379,000 c. 450,000 d. 429,000
- Brooks Company leases a machine from TCS Company on 1/1/23. Given: $100,000 $85,000 $20,711 $5,000 $8,000 4% Asset FMV Asset Book Value January 1 payments Guaranteed Salvage Value Lessee expected salvage value Implicit and incremental rates Five-year lease; five-year asset Determine the TCS Lease Receivable at 12/31/23. Select one: a. $79,289 O b. $76,117 c. $76,819 d. $82,461 e. $74,289PROBLEM 5: Lease Agreement with UNGUARANTEED Residual Value, RESTORATION COST and ANNUAL EXECUTORY COST Lazy Company leased a building with useful life of 10 years on January 1, 2020 for period of 8 years with fixed annual rental ofP800,000 which is to be paid at the end of each year. The residual value of P100,000 is unguaranteed. Initial direct cost incurred andpaid by the lessee amounted to P150,000. Additional payment to the lessor to obtain the long-term arrangement of the leaseamounts to P100,000. Annual property taxes/insurance/maintenance and other executory costs paid P90,000. The lease agreementfurther provides restoration cost of the leased asset at the end of lease term for P250,000 (present value). The implicit interest ratein the lease is 10%. REQUIRED: Prepare table of amortization and journal entries for the entire lease termmpany purchaseda Problem 10-32 (IFRS) under a finance At the beginning of current year, Southstar Company leased a building with the following information: ity were originally Annual rental payable at the end of each lease year Initial direct cost paid Lease incentive received Lease bonus paid to lessor before commencement of lease Present value of cost of restoring the building as required by contract discounted at 8% Purchase option that is reasonably certain Lease term Useful life of building Implicit inierest rate Present value of an ordinary annuity of 1 at 10% for 6 periods Present value of 1 at 10% for 6 periods 1,500,000 405,000 50,000 300,000 lated depreciation and the remaining 0,000. -P1,500,000 cash. 945,000 1,000,000 6 years 10 years 10% 4.36 0.56 of the machinery 1. What amount should be recorded initially as cost of right of use asset? a. 8,750,000 b. 8,700,000 c. 9,900,000 d. 7,755,000 2. What amount should be recorded as annual depreciation of the right of the asset?…
- At the beginnig of current year, East Company leased a new machine from North Company with the following information: Annual rental payable at beginning of each lease year 4000,000Lease Term 10 yearsUseful life of machine 12 yearsImplicit interest rate 14% Present value of an annuity of 1 in advance for 10 periods at 14% 5.95Present value of 1 for 10 periods at 14% 0.27 East company had the option to purchase the machine upon the expirtation of the lease term by paying P500,000. The purchase option is reasoably certain to be exercised. What amount should East Company…On January 1, 2021, Wait Company leased equipment from a lessor with the following information:Annual rental payable every December 31: 2,000,000Residual value guarantee: 1,000,000Initial direct cost: 600,000Estimated dismantling and restoration cost required by contract at present value: 780,000Annual executory cost paid by the entity: 100,000The lease term is four years while the equipment’s useful life is 8 years. The implicit rate in the lease, known by the entity, is 10%. The present value of an ordinary annuity of 1 at 10% for 4 periods is: 3.17. The present value of 1 at 10% for 4 periods is: 0.68. What is the initial lease liability? 6,340,0007,020,0008,000,0008,400,000 What is the cost of the right of use asset? 6,340,0007,020,000 8,400,0008,000,000On January 1, 2020, ABC Company leased a machinery with the following information: Annual rental payable at the end of each year 1,000,000 Residual Value Guarantee 500,000 Payment to lessor to obtain a long-term lease 300,000 Cost of dismantling and restoring the asset as required by contract at present value 390,000 Annual executory cost paid by lessee 50,000 Lease Term 4 years Useful life of the machinery 8 years Implicit Interest Rate 10% 1. What is the initial lease liability? 2. What is the cost of right of use asset?
- P330,000 including executory cost of P30,000, and the machine · for the lease of a machine from another entity. The machine Troy Company prepared the following amortization schedule shall be returned to the lessor at the end of the lease term. The lease agreement required four annual payments of Problem 10-10 (IFRS) had an economic life of six years. Reduction Balance of liability Interest Minimum lease payment expense liability 1 /1/2021 12/31/ 2021 12/31/2022 12/31/ 2023 12/31/ 2024 300,000 300,000 300,000 300,000 98,515 78,366 56,203 31,766 201,485 221,634 243,797 268,234 985,150 783,665 562,031 318,234 50,000 Required: 1. Prepare journal entry to record the finance lease on January 1, 2021. 2. Prepare journal entry on December 31, 2021 to record the annual lease payment and the executory cost. 3. Prepare journal entry to record the depreciation for 2021. 4. Prepare journal entry to record the annual lease.payment and the executory cost on December 31, 2024. 5. Prepare journal entry…On January 1, 2021, Wait Company leased equipment from a lessor with the following information: Annual rental payable every December 31: 2,000,000Residual value guarantee: 1,000,000Initial direct cost: 600,000Estimated dismantling and restoration cost required by contract at present value: 780,000Annual executory cost paid by the entity: 100,000 The lease term is four years while the equipment’s useful life is 8 years. The implicit rate in the lease, known by the entity, is 10%.§ The present value of an ordinary annuity of 1 at 10% for 4 periods is: 3.17§ The present value of 1 at 10% for 4 periods is: 0.68 1. What is the initial lease liability? Group of answer choices 6,340,000 7,020,000 8,000,000 8,400,000 2. What is the cost of the right of use asset? Group of answer choices 6,340,000 7,020,000 8,400,000 8,000,000Problem 10-30 (IFRS)At the beginning of current year, Southstar Company leased a building withthe following information:Annual fixed payment in advance at the beginning of each lease year1, 000, 000Initial direct cost paid350, 000Least incentive received150, 000Lease bonus paid to lessor before commencement of lease100, 000Discounted amount of restoring the building as required by contract200, 000Purchase option that is not reasonably certain to be exercised300, 000Lease term 5 yearsUseful life of building 8 yearsImplicit interest rate 8%Present value of an annuity of 1 in advance at 8% for 5 periods 4.31Present value of 1 at 8% for 5 periods .68 1. What is the initial lease liability?a. 4, 514, 000b. 4, 310, 000c. 4, 614, 000d. 4, 764, 0002. What is the cost of right of use asset?a. 4, 814, 000b. 4, 810, 000c. 4, 710, 000d. 4, 610, 000
