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

Accounting individual assignmentpart 1 - royal oak taxation

ACCOUNTING INDIVIDUAL ASSIGNMENT PART 1 - Royal Oak Taxation Advisory Service has the following transactions for the month of December 2016: Dec. 1 Commenced business by depositing $50 000 in a bank account in the name o ...

Question 1based upon the narrative describing the case what

Question 1: Based upon the narrative describing the case, what cultural element (per Ferraro) was most likely a major contributing factor to the accident? Question 2: If you were brought to the investigation, what recomm ...

Accountinguse the internet to research an annual report of

Accounting Use the Internet to research an annual report of a retail company. • Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or creditor with the most impor ...

Assignmentapplication implementation of the balanced

Assignment Application: Implementation of the Balanced Scorecard APA Format Implementation of the Balanced Scorecard The term "balanced scorecard" became part of the professional accounting vernacular in the early 1990s. ...

This assignment will assess the following learning

This assignment will assess the following learning outcomes: - Demonstrate the impact on the financial statements and the implication for different users of accounts of alternative ways of treating controversial accounti ...

Assignmentapplication break-even analysiswhen expenses and

Assignment Application: Break-Even Analysis When expenses and revenues are equal, this is known as the "break-even point" or BEP. To determine break-even, an examination of fixed and variable costs (expenses) in relation ...

Assignmenta manufacturing company is thinking of launching

Assignment A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and m ...

Assignmentpart iexplain what you learn about the

Assignment PART I Explain what you learn about the disclosures of your SEC 10-K company relating to Income Taxes. Your comments should relate to net income or loss as well as to the balance sheet treatment and disclosure ...

Individual internal accountants report to managementyou are

Individual Internal Accountants Report to Management You are the internal accountant at a company that is preparing for an upcoming government contract bid. The management in your company is deciding if it is necessary f ...

Question 1 which of the following results in an increase in

Question 1. Which of the following results in an increase in the equity in investee income account when applying the equity method? Unrealized gain on intercompany inventory transfers for the prior year Amortizations of ...

  • 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