IATE ALLOON TINGII (ACCT 316) t, Study & Practice Gradebeok ORION Dewnlondable e
ID: 2550647 • Letter: I
Question
IATE ALLOON TINGII (ACCT 316) t, Study & Practice Gradebeok ORION Dewnlondable eTextbook Brief Exercise 20-13 Sunland Corporation, which uses ASPE, enters into a 5 2017. In addition, Surland guarantees the lessor a residual value of $1 roblem -year loase of equipment on September 13, 2017 that requires 5 annual payments of $28,300 each, beginning September 13 se 202 7,500 at lease end. The equipment has a useful life of 5 years. Assume that for Coronado Corporation, tha cacas coi r predcabie, there are no important uncetainties concerring casts, and the equpment's carrying amount is $102,00. (Use tatles below, a finandai 2 Prepare Coronado's September 13, 2017 ournal entries assuming an interest rate of 12% entered. Do not iadent no Ondr aca nt ti I sa parte natien y m e ted when he amo unt is manually. If no entry is roguired, select "No Entry" for the account tities and enter 0 for the amounts. Round factor vaures to 5 decima places, e.g. 1.25124 and final answers to O decimal places, e.g- 5,275) Date Account Tities and Explanation Sept. 13 ts.kv.studv Credit (To recard inception of lease) Sept. 13 (To record cost of equipment sold) Sept. 13 pu.com/edugen u pe here to searchExplanation / Answer
Berne Company (Lesser) Lease Amortization Schedule a. Computation of Net Investment Date Lease Payment Received Interest Revenue at 12% on Net Investment Lease Receivable Unearned Interest Leases net Investment Annual Rental $28,300 13/09/2017 $159,000 $34,813 $124,187 Cumm PVF @12% for 5 Year 4.03735 13/09/2017 $28,300 $130,700 $34,813 $95,887 Present Value of Lease rental (a) $114,257.01 13/09/2018 $28,300 $11,506 $102,400 $23,307 $79,093 Present Value of Gurrented Residual Value a($17500*0.56742) (b) $9,930.00 13/09/2019 $28,300 $9,491 $74,100 $13,815 $60,285 Net Investment/ Present value of Lease (a+b) $124,187.01 13/09/2020 $28,300 $7,234 $45,800 $6,581 $39,219 or Round Off with $1.88 $124,187 13/09/2021 $28,300 $4,706 $17,500 $1,875 $15,625 Gross Lease Receivable/ Gross Investment ( $28300*5+17500) $159,000.00 13/09/2021 $17,500.0 $1,875 $0 $0 $0 Carrying Value $102,000.00 This is Sale type Lese because Carrying Value is vary from Net Lease Receivable Journal Entry in the books of Berne Company Date Account & Explanation Debit Credit 13/09/2017 Lease Receivable $159,000.00 Cost of Goods Sold $102,000.00 Sales $124,187.00 Unearned interest on Lease $34,813.00 Equipment -ASS $102,000.00 To Record Sale , Lease Receivable and Uneraned Interest 13/09/2017 Cash $28,300.00 Lease Receivable $28,300.00 To Record First Lease Rental Received