ROGERS 11:28 PM edugen.wileyplus.com C 4 Kieso, Intermediate Accounting 11e, Vol
ID: 2551704 • Letter: R
Question
ROGERS 11:28 PM edugen.wileyplus.com C 4 Kieso, Intermediate Accounting 11e, Volume 2 Gradebeak ORION riole Corporation, which uses ASM, ensers into a 7 year lease of equipment on September 13. 2017 that requires 7 annual payments o 33,500 each, beginning September 13, 2017. In addition Oriole garantees the lessor a residual value of $23,000 at lease end The equgrment has a useful life of 7 years. Assume that for Mangold Corporation the lessor, colectbley reasonably predtable there are n mportant uncertanties concert ng costs,·ed the eqaprmerrs carrying amourt is $176000 luse tables below. fnancal calculator, or functions Prepare Marigolds September 13, 2017 journal eneries assuming an interest rate of 6(Credit accoune titles ane automoticolly indent ulen the-unt is entered. Donat indent m y.zgeo entryisregared, select . Entrr acc-titles enter omounts. Round foctor values to 5 decimal ploces e.g. 125124 and final answers to 0 decimal places,eg 5275 Date Account Tites and Explanation Sept 13 Debit To record incepoion of lease) Sept 13 To record cost of equipmen sold Sept 13 To record receipt of fist lease paymenExplanation / Answer
Solution:-
PV of Lease payments = 33500 + 33500*4.92(PVAF) + 23000*0.6651(PVIF) = 48797
Lease Receivable A/c Dr. 48797
To Fixed Asset 48797
Cash A/c Dr. 33500
To Lease Receivable 33500
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