Assignment
• 1. FUTURE VALUE OF 1 TABLE. Contains the amounts to which 1 will accumulate if deposited now at a specified rate and left for a specified number of periods (Table 6.1).
• 2. PRESENT VALUE OF 1 TABLE. Contains the amounts that must be deposited now at a specified rate of interest to equal 1 at the end of a specified number of periods (Table 6.2).
• 3. FUTURE VALUE OF AN ORDINARY ANNUITY OF 1 TABLE. Contains the amounts to which periodic rents of 1 will accumulate if the payments (rents) are invested at the end of each period at a specified rate of interest for a specified number of periods (Table 6.3).
• 4. PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 TABLE. Contains the amounts that must be deposited now at a specified rate of interest to permit withdrawals of 1 at the end of regular periodic intervals for the specified number of periods (Table 6.4).
• 5. PRESENT VALUE OF AN ANNUITY DUE OF 1 TABLE. Contains the amounts that must be deposited now at a specified rate of interest to permit withdrawals of 1 at the beginning of regular periodic intervals for the specified number of periods (Table 6.5).
Exercise 21-8 (Part Level Submission)
The following facts pertain to a noncancelable lease agreement between Windsor Leasing Company and Sheridan Company, a lessee.
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.
Prepare a lease amortization schedule for Sheridan Company for the 5-year lease term.
The parts of this question must be completed in order. This part will be available when you complete the part above.
Question 28
On January 1, 2017, Bonita Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Bonita to make annual payments of $8,026 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $4,900 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Bonita uses the straight-line method of depreciation for all of its plant assets. Bonita's incremental borrowing rate is 10%, and the lessor's implicit rate is unknown.
Compute the present value of the minimum lease payments.
Prepare all necessary journal entries for Bonita for this lease through January 1, 2018.
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.
Attachment:- Template.rar