On June 30, 2023, Sharma Corp. sold equipment for its fair value of $300,000. The equipment had a book value of $500,000 and a remaining useful life of 10 years. The same day, Sharma leased back the equipment at $6,000 per month for 5 years with no option to renew the lease or repurchase the equipment. Sharma's equipment rent expense for this equipment for the year ended December 31, 2023, should be A) $72,000. B) $36,000. OC) $30,000. D) $24,000.
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- At the beginning of Year 1, Cactus Company has three employees: A, B, and C. Employee A has 3 expected years of future service. Employee B has 4 expected years of future service, and Employee C has 5 expected years of future service. Using the year-of-future-service method, compute the amortization fraction for Years 1 through 5 that Cactus would use to amortize its prior service cost.On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.To raise operating funds, Pepero Company sold its equipment on March31, 2019 for P470,000 and immediately leased the equipment back. Thefair value of the asset is P700,000 and the equipment has a carrying valueof P650,000. The annual rental payments of P100,000 is significantlylower than the fair rental of P125,000 for this type of equipment. Leaseterm is 12 years out of total life of 25 years. How much loss should bedeferred beyond 2019 as a result of this leaseback transaction? A. P11,250B. P168,750C. P180,000D. P52,500
- On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $794,023 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $106,000. Negotiations led to the lessee guaranteeing a $152,000 residual value. Equal payments under the lease are $206,000 and are due on December 31 of each year with the first payment being made of December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. 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. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease. >…On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $779,677 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $103,000. Negotiations led to the lessee guaranteeing a $146,000 residual value. Equal payments under the lease are $203,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. 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: Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease.On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $794,023 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $106,000. Negotiations led to the lessee guaranteeing a $152,000 residual value. Equal payments under the lease are $206,000 and are due on December 31 of each year with the first payment being made o December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. 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. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease.…
- On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $865,757 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $121,000. Negotiations led to the lessee guaranteeing a $182,000 residual value. Equal payments under the lease are $221,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments.16. On January 1, 2020, Roque Company purchased a new machine for P6,000,000 for the purpose of leasing it. Themachine had an estimated 10-year life. On April 1, 2020, the Roque leased the machine to a lessee for threeyears at a monthly rental of P400,000. The lessee paid the rental for one year of P4,800,000 on April 2020 andadditionally paid P600,000 to the lessor as a lease bonus to obtain the three-year lease. On April 1, 2020, Roquepaid P100,000 to a broker as a finder fee.What is the net rental income of Roque Company for 2020?On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $865,757 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $121,000. Negotiations led to the lessee guaranteeing a $182,000 residual value. Equal payments under the lease are $221,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. 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) Create the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. 2) Create all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease. please hep me…
- Maureen Inc. is a dealer of machinery. On January 1, 2020, it leased a machinery to another entity under the following terms:· Annual rental payable at the end of each year: 1,500,000· Lease term and useful life of machinery: 5 years· Cost of machinery in Maureen’s books: 4,000,000· Fair value of machinery on commencement: 6,000,000· Guaranteed residual value upon return: 500,000· Implicit rate: 12%Relevant PV factors are: PV of ordinary annuity for 5 periods at 12% is 3.60 and PV of 1 for 5 periods at 12% is 0.57. Machinery will revert back to Maureen at end of lease term. Fair value of the asset on December 31, 2024 (end of lease) is 350,000. Maureen also incurred initial direct costs of P200,000. How much is the gross profit of Maureen on January 1, 2020? a. 1,800,000 b. 1,485,000 c. 1,685,000 d. 2,000,000On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. ● . Negotiations led to the lessee guaranteeing a $152,000 residual value. Equal payments under the lease are $206,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. 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. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease. The equipment cost Nevels $794,023 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $106,000.…