Chapter 14 Homeworx × e Accounting question I Cl× CSecure https://newconnect.mhe

Question

Chapter 14 Homeworx × e Accounting question I Cl× CSecure https://newconnect.mheducation.com/flow/connect.html Problem 14-11AC Capital lease accounting LO C3 [The following information applies to the questions displayed below.j Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $29,000, and the interest rate is 7%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Problem 14-11AC Part 3 3. Complete a lease payment schedule for the five years of the lease with the following headings. Assume that the beginning balance of the lease liability is the present value of lease payments. Beginning Balance of Cash Lease Ending Balance of Period Ending Interest on Reductio n of Date Year 1 Year 2 Year 3 Year 4 Year 5 Total Lease Liability Lease Liability Lease Liability Payment Lease Liability $118,906 29,000 29,000 10:19 AM Type here to search 9/15/2018

Explanation / Answer

Question - 1

(1) Decimals rounded to nearest cent.

(2) Interest on lease liability = Beginning balance * 0.07

(3) Reduction in lease liability = Cash lease payment - Interest on lease liability

(4) Ending balance = Beginning balance - Reduction in lease liability

Question - 2

Annual depreciation using straight line method of depreciation = (Cost - salvage) / Life

(118906 - 0) / 5 years =  23781.2

Period Ending Date Beginning Balance of Lease Liability Interest on Lease Liability Reduction of Lease Liability Cash lease payment Ending Balance of Lease Liability Year 1 118906 8323.42 20676.58 29000 98229.42 Year 2 98229.42 6876.06 22123.94 29000 76105.48 Year 3 76105.48 5327.38 23672.62 29000 52432.86 Year 4 52432.86 3670.3 25329.7 29000 27103.16 Year 5 27103.16 1897.22 27102.78 29000 0.38 (or) 0

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.