Ask Question, Ask an Expert


Ask Accounting Basics Expert

On January 1,2004, Haden Company (as lessor) entered into a noccancelable lease agreement with Sandy Corporation for machinery which was carried on the accounting records of Haden at $4,530,000 and had a market value of $4,800,000. Minimum lease payments under the lease agreement which expires on December 31,2013, total $7,100,000. PAYMENTS of $710,000 are due each January 1. The first payment was made on January 1, 2004 when the lease agreement was finalized. The interest rate of 10%which was stipulated in ths lease agreement is the implicit rate set by the lessor. The effective interest method of amortization is being used. Sandy expects the machines to have a ten year life with no salvage value, and be depreciated on a straight-line basis. Collectibility of the rentals is reasonably predactible, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.

a, From the lessee's viewpoint,what kind of lease is the above agreement. From the lessor's viewpoint, what kind of lease is this agreement?

b.What should be the income before income taxes derived by Haden from the lease for the year ended December 31,2004?

c. Ignoring income taxes, what should be the expenses incurred by Sand from the lease for the year ended December 31,2004?

d, What journal entries should be recorded by Sandy Company for all of 2004?

e. What journal entries should be recorded by haden Company for all of 2004?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M945559

Have any Question? 

Related Questions in Accounting Basics

Discussionpart 1 please respond the following question no

Discussion Part 1 please respond the following question no less then 350 words (original work, no plagiarism, 1 reference "learning experience and application of knowledge" please respond to the following: • Assume you h ...

Accountingflexible budgets and cost variances please

Accounting Flexible Budgets and Cost Variances: Please respond to one of the following: Option 1 Suggest how management can use the real-time variance data analysis to improve operations. Evaluate the potential risk that ...

Assignmentas my town is very small and i was unable to find

Assignment As my town is very small and I was unable to find the CAFR, but I was able to find reports for my nearest city (and the one I work in), Concord, NH, for the fiscal year ending June 30, 2015. One thing that I f ...

Kiona co set up a petty cash fund for payments of small

Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for ...

You are starting your own internet business you decide to

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. is scheduled to launch 6 months from today. You estimate that the annual cost of this business ...

Audit report modificationsthe final paper will be based on

Audit Report Modifications The final paper will be based on Appendix 6C Illustrative Audit Case: Keystone Computers at pages 237-244 in your text. Write, in outline format but in complete sentences, a 6 to 10 page audit ...

Fasb ongoing projectproject objectivedescribe the history

FASB Ongoing Project Project Objective Describe the history, current status, and adoption implications of a Financial Accounting Standards Board ongoing project. Requirements The FASB has several ongoing projects that in ...

Assignment comparing capital expenditurescomparing capital

Assignment: Comparing Capital Expenditures Comparing Capital Expenditures Select a company and access the last three years' annual reports. Next, select a company that is a direct competitor and download the previous thr ...

After reading the article ernst amp youngs liability for

After reading the article "Ernst & Young's Liability for Lehman Larger Than Claimed," Discuss Ernst & Young's "going-on" liability after their 2007 arbitrary cutoff of responsibility from Lehman Brothers financial statem ...

Assignmentpart 11 which of the following would cause a

Assignment Part 1 1. Which of the following would cause a contra-asset to be credited and an expense debited? a. Recording an accrued expense b. Recording the consumption of supplies c. Recording the building depreciatio ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

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