Sarasota Equipment Leasing Company leased equipment to Sunland Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $580000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Sarasota Equipment Leasing and known to Sunland Healthcare is 8%. Sunland's incremental borrowing rate is 12%. The cost of the equipment on Sarasota Equipment Leasing accounting records was $780000. Assuming that the lease is appropriately recorded as an operating lease, on January 1 of each year when the payment is received and recorded by Sarasota Equipment Leasing Company as a debit to Cash, there would also be a: PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 12%, 4 periods 3.40183 3.03735 0.63552 credit to Lease Revenue of $580000. credit to Accumulated Depreciation of $580000. O credit to Unearned Lease Revenue of $580000. O credit to Gain on Sale of Asset of $132917.

Sarasota Equipment Leasing Company leased equipment to Sunland Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $580000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Sarasota Equipment Leasing and known to Sunland Healthcare is 8%. Sunland's incremental borrowing rate is 12%. The cost of the equipment on Sarasota Equipment Leasing accounting records was $780000. Assuming that the lease is appropriately recorded as an operating lease, on January 1 of each year when the payment is received and recorded by Sarasota Equipment Leasing Company as a debit to Cash, there would also be a: PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 12%, 4 periods 3.40183 3.03735 0.63552 credit to Lease Revenue of $580000. credit to Accumulated Depreciation of $580000. O credit to Unearned Lease Revenue of $580000. O credit to Gain on Sale of Asset of $132917.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Martinez Equipment Leasing Company leased equipment to Cullumber Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $370000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Martinez Equipment Leasing and known to Cullumber Healthcare is 8%. Cullumber's incremental borrowing rate is 12%. The cost of the equipment on Martinez Equipment Leasing accounting records was $820000. Assuming that the lease is appropriately recorded as an operating lease, at what amount is the lease recorded on Cullumber Healthcare System's books on January 1, 2025? PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 12%, 4 periods 3.40183 3.03735 0.63552 no entry to record an operating lease. $1323527 $1480000 $789167
Flounder Equipment Leasing Company leased equipment to Pharoah Healthcare System on January 1, 2025, for a four- year period. Equal annual payments under the lease are $560000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Flounder Equipment Leasing and known to Pharoah Healthcare is 8%. Pharoah's incremental borrowing rate is 11%. The cost of the equipment on Flounder Equipment Leasing accounting records was $680000. Assuming that the lease is appropriately recorded as an operating lease, what is the amount of profit on the sale that Flounder Equipment Leasing would record for the year ended December 31, 2025? 8%, 4 periods 11%, 4 periods $1323176 $509091 O $629091 $0 PV Annuity Due PV Ordinary Annuity PV Single Sum 3.57710 0.73503 3.44371 3.31213 3.10245 0.65873
On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $509,761 over a five-year lease term (also the asset's useful life). payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's Incremental borrowing rate is 8% the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $4.3 million. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. What amount related to the lease would IC report In Its balance sheet on December 31, 2024 (Ignore taxes)? 2. What amount related to the lease would IC report in its Income statement for the year ended December 31, 2024 (Ignore taxes)? Note: For all requirements, enter your answers in whole dollars and not in millions. Round the…
On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgla-Atlantic to make semiannual lease payments of $414,921 over a five-year lease term (also the asset's useful life). payable each June 30 and December 31, with the first payment on June 30, 2024. Georgla-Atlantic's incremental borrowing rate is 8%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $3.5 million. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. What amount related to the lease would IC report in its balance sheet on December 31, 2024 (ignore taxes)? 2. What amount related to the lease would IC report in its income statement for the year ended December 31, 2024 (ignore taxes)? Note: For all requirements, enter your answers in whole dollars and not in millions. Round the…
On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $779,224 over a three-year lease term (also the asset’s useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 9%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $4.2 million. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. What is the pretax amount of net receivable? 2. What is pretax amount of interest revenue? Ignore taxes for both questions
On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $779,224 over a three-year lease term (also the asset's useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 9%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $4.2 million. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. What amount related to the lease would IC report in its balance sheet on December 31, 2024 (ignore taxes)? 2. What amount related to the lease would IC report in its income statement for the year ended December 31, 2024 (ignore taxes)? Note: For all requirements, enter your answers in whole dollars and not in millions. Round the…
On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $677,829 over a four-year lease term (also the asset's useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $4.6 million. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. What amount related to the lease would IC report in its balance sheet on December 31, 2024 (ignore taxes)? 2. What amount related to the lease would IC report in its income statement for the year ended December 31, 2024 (ignore taxes)? Note: For all requirements, enter your answers in whole dollars and not in millions. Round the…
On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgla-Atlantic to make semiannual lease payments of $583,573 over a four-year lease term (also the asset's useful life). payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's Incremental borrowing rate is 11%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Inc. at a cost of $3.9 million. (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.) Required: 1. What pretax amount related to the lease would IC report in its balance sheet at December 31, 2021? 2. What pretax amount related to the lease would IC report in its Income statement for the year ended December 31, 2021? (For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole…
On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term (also the asset’s useful life), payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic’s incremental borrowing rate is 10%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Inc. at a cost of $3 million.Required:1. What amount related to the lease would IC report in its balance sheet at December 31, 2021 (ignore taxes)?2. What amount related to the lease would IC report in its income statement for the year ended December 31, 2021 (ignore taxes)?
On June 30, 2024, Georgla-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement. calls for Georgia-Atlantic to make semiannual lease payments of $464,149 over a four-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $3.25 million. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1, EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1 Required: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What amount related to the lease would Georgia Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? 3. What amount related to the lease would…
On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $463,866 over a four-year lease term (also the asset’s useful life), payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 11%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Inc. at a cost of $3.1 million. (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. What pretax amount related to the lease would IC report in its balance sheet at December 31, 2021?2. What pretax amount related to the lease would IC report in its income statement for the year ended December 31, 2021?
On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from Builders, Incorporated The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $512,709 over a 5-year lease term (also the asset's useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 12.0%, the same rate Builders used to calculate lease payment amounts. Builders manufactured the equipment at a cost of $3.5 million. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price at which Builders is "selling" the equipment (present value of the lease payments) on June 30, 2024. 2. What amount related to the lease would Builders report in its balance sheet on December 31, 2024 (ignore taxes)? 3. What line item amounts related to the lease would Builders report in its income statement for the year ended…