(Answered) Problem - bush inc leases a knowledge machine from clinton

Accounting

Problem - Bush, Inc. leases a knowledge machine from Clinton Leasing Inc. on December 31,2008. The following dad is available regarding the lease:

1. The term of the lease is 3 years with renewal option of bargain purchase option.

2. The annual lease payments of $72618.82 are due on 12/31 of each year beginning with dec 31, 2008. Include in the above amount $5000.00 of executory costs.

3. Bush's incremental borrowing rate is 15% and Clinton's is 10% which is known by the lessee. The following present value factors for 3 period are available:

PV of an ordinary annuity: 10% is 2.48685, 15% is 2.28323

PV of an annuity due: 10% is 2.73554, 15% is 2.6571

PV of a lump sum: 10% is .75132, 15% is .65752

4. The fair value of the equipment was $200,000. The useful life of the equipment is 4 years. The salvage value of the equipment is guaranteed and is 20,000. The Equipment is depreciated under the straight line method.

Required -

Prepare an amortization table for the lessee in good form.

Prepare all journal entries for 2008 & 2009 to record the lease, the lease payments, and depreciation.

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92407755
Price:- $25

Verified Expert

Priced at $50 Now at $25, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - asset acquisition vs stock purchase fair value

Question - Asset acquisition vs. stock purchase (fair value is greater than book value) Assume the investor purchases the same assets in #24, but now assume that the cash purchase price is $21,000. The investor is willin ...

Quesiton instructions first locate the financial statement

Quesiton: Instructions: First, locate the financial statement (10 - K Annual Reporting) information for each company (listed below) that you will be investigating for your final project. This information can be found on ...

Question - cranberry corporation has 3396000 of current

Question - Cranberry Corporation has $3,396,000 of current year taxable income. Use Corporate tax rate schedule. If the current year is a calendar year ending on December 31, 2017, calculate Cranberry's regular income ta ...

Question - eagle owns 80 of flyways common stock that was

Question - Eagle owns 80% of Flyway's common stock that was purchased at its underlying book value. The two companies report the following information for 2004 and 2005. During 2004, one company sold inventory to the oth ...

Question - tony madison needs 248900 in 10 yearshow much

Question - Tony Madison needs $248,900 in 10 years. How much must he invest at the end of each year, at 4% interest, to meet his needs?

Question revenue from contracts with customers

Question: Revenue From Contracts With Customers Examples Part I: For each of the scenarios determine if a contract exists by applying the 5 requirements for a contract to exist under ASC 606. 1. For each of the following ...

Taxation law assignment -in june 2016 tom had signed an

TAXATION LAW ASSIGNMENT - In June 2016 Tom had signed an agreement in Sydney with XYZ Ltd to act as the company's plantation manager in Brunei until June 2018. At the time of signing the agreement, Tom was advised that i ...

Question - larry recently invested 23000 tax basis in

Question - Larry recently invested $23,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is also $23,000. In addition, Larry's share of the limited partnership loss for the year is $2,150, ...

Question - stockman corp purchased 10 1000 6 bonds of

Question - Stockman Corp. purchased 10, $ 1,000 6% bonds of Energy Corporation when the market rate of interest was 14%. Interest is paid semiannually on the bonds, and the bonds will mature in six years. Using the PV fu ...

Question - sweet corporation had net sales of 2429800 and

Question - Sweet Corporation had net sales of $2,429,800 and interest revenue of $40,500 during 2017. Expenses for 2017 were cost of goods sold $1,452,600, administrative expenses $221,700, selling expenses $289,000, and ...

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

Recent Questions

Ask Accounting Basics Expert