Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Hayes Company signs a five-year non-cancelable lease with Lester Company on January 1, 2008, when the lease begins. The lease calls for five payments of $79,139 to be made at the beginning of each year. The leased asset has a fair value of $350,000 on January 1, 2008. The lease has no renewal option, and possession of the asset reverts to the lessor on January 1, 2013. Hayes Company regularly uses the straight-line method to depreciate assets of this type that it owns. Lester also uses the straight-line method for depreciation purposes. The leased asset has an expected economic life of six years. The lease required Lester Company to guarantee that the asset's residual fair value on that date would be no lower than $20,000 when it returns to lease on January 1, 2013. Executory costs paid to the lessor by are $2,000 per year and are not included in the minimum lease payments. Lessor's implicit interest rate is 11% and lessee borrowing rate is 10%. The lessee is not aware of the lessor's implicit rate.

Required:

a. Give the appropriate journal entries for Lester Company through December 31, 2009.

b. Based on the above lease contract, answer the following:

-Item(s) and related amount(s) in years 2008 and 2009 reported on:

1. Income Statement
2. Balance Sheet
3. Statement of Cash Flows

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M944466

Have any Question? 


Related Questions in Accounting Basics

Problem 1the following information relates to billy bobs

Problem 1 "The following information relates to Billy Bob's Donuts defined benefit pension plan during the current reporting year (All the amounts are in millions): Plan Assets at the beginning of the year $350 Expected ...

The balance sheet provides a snapshot of the financial

The Balance Sheet provides a snapshot of the financial condition of a company at the end of an accounting period. It shows the assets, liabilities, and owner's equity in the business. 1. Identify each of the following as ...

How do finance and accounting play a role in ethics and

How do finance and accounting play a role in ethics and sustainable positive social change? How might you use accounting or finance to support this role that you described above?

Accountingimagine that you are a consultant working on a

Accounting Imagine that you are a consultant working on a special project to help a company determine techniques that it can use in order to calculate the fair value of investments. From the e-activity, prepare a report ...

Company annual report study -choose any company and make a

COMPANY ANNUAL REPORT STUDY - Choose any company and make a report: Introduction (about 100 words) Conceptual framework (300 words) Ethics (not more than 150 words) Corporate governance (not more than 150 words) Legitima ...

Accounting for gov amp not for profit1 explain in 2-4

ACCOUNTING FOR GOV & NOT FOR PROFIT 1. Explain in 2-4 sentences the difference between government Agency funds and Fiduciary funds. 2. What information is or is not required to be reported in the RSI for pension plans un ...

Individual research papercompany case study assignmentthis

Individual Research Paper Company Case Study Assignment This assignment has a number of learning objectives, sources, and opportunities: 1. You will explore financial performance and investor information available fromva ...

Essay question internal accountingone to two pages single

Essay Question Internal Accounting One to two pages (single spaced, Times New Roman 12 font) discussion. Clear and well-argued showing depth of knowledge and understanding of the concepts. Check grammar and spelling. Que ...

Learning outcomescode descriptiona1 in-depth and systematic

Learning outcomes Code Description A1 in-depth and systematic understanding of key investment concepts to facilitate strategic real estate investment decision-making A4 critical awareness and understanding of the evolvin ...

Write a 700- to 1050-word paper including the followingthe

Write a 700- to 1,050-word paper including the following: The purpose of accounting and financial reporting within your organization or an organization with which you are familiar. A description of the people, processes, ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen