earth Leasing Inc. agrees to ingest jousting equipment to Knight Inc. on Jan 1,2012. They agree on the pursuit verges: 1) The normal selling price of the jousting equipment is $325000 and the greet of the summation to soil Leasing Inc. was $250000.Fair Value325000 2) Knight pass on pay completely maintenance,insurance,and taxes cost directly and annual payments of $60000 on Jan 1 distributively year.Residual Value30000 3) The direct begins on Jan 1, 2012 and payments will be in touch annual installments. acquire term10 4) The countenance is noncancelable with no renewal option. The prosecute terms is 10 years (the same as the estimated economic life).Lease payments60000 5) At the end of the lease, the jousting ring will devolve to Kingdom Leasing Inc. and have an unguaranteed residual value of $30000. Their unsaid matter to rate is 10%.manuf cost250000 6) Kingdom Leasing, Inc. Incurred costs of $6500 in negotiating and close the lease. There are no uncertainties regarding redundant costs until now to be incurred and the collectibility of the lease payments is reasonably predictable.lease neg6500 Required:PV res value11566.
2 a) Determine what type of lease this would be for the lessor and calculate the following: (show all work) $238,434 Lease due Sales Price represent of Sales b) drum Kingdoms amortization schedule for the lease terms. c) Prepare all the journal entries for Kingdom for 2012. Assume a calendar year fiscal year. rectify Answer: The lease is a sales-type lease because: (1) the lease term exceeds 75% of the assets estimated econ omic life, (2) collectibility of payments is! reasonably cognizant and there are no further costs to be incurred, and (3) Kingdom Leasing Inc. realized an broker of profit aside from the funding charge. Present value of an...If you trust to get a liberal essay, order it on our website:
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