Werner chemical inc leased a protein analyzer on september, Ask an Expert

Accounting

Werner Chemical, Inc., leased a protein analyzer on September 30, 2016. The five-year lease agreement calls for Werner to make quarterly lease payments of $407,863, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2016. Werner's incremental borrowing rate is 8%. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1. Determine the present value of the lease payments at September 30, 2016.

2. What amounts related to the lease would Werner report in its balance sheet at December 31, 2016 (ignore taxes)?

3. What amounts related to the lease would Werner report in its income statement for the year ended December 31, 2016 (ignore taxes)?

4. What amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2016 (ignore taxes)?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92047360

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