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CH21 - E211 a...

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E21-1 a. b. Adams Corporation Computation of present value of minimum lease payments 1/1/2011 =  9,968  x 4.17 =  41,565  Adams Corporation Journal entries c. 1/1/10 Leased Machine under Capital  Leases  41,565  Lease Liability  41,565  Lease Liability  9,968  Cash  9,968  12/31/10 Depreciation Expense  8,313   8,313  Interest Expense  3,160   3,160  1/1/11 Lease Liability  6,808  Interest Payable  3,160  Cash  9,968  This is capital lease to Adams since the lease term (5 years) is greater than 75% of the eco (6 years)of the leased asset. The lease term is 83 1/3  (5/6) of the asset's economic life. PV of and Annuity Due = R(PVF-OA 5,10% ) Accumulated Depreciation- Capital Leases  ($41,565/5=$8,313) Interest Payable [(41,565- $9,968)x10%]
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onomic life 
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E21-5 Jacobsen Leasing Company  The Type of the lease arrangement 12/31/2011 a. Cost (fair market value of leased asset) $75,000  Amount to be recovered by Lessor through lease Payments $75,000  Three annual lease payments: $75,000/2.53130 $29,629 
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  • Spring '10
  • rishard
  • Adams Corporation, Lease Liability Lease, Lease Liability Cash, Grady Leasing Company, Adams Corporation Journal

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