Excel_Project_4_James_Holliday - Name: James Holliday...

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Exercise 21-3, Page 1 of 2, 05/02/2011, 07:04:41 Name: James Holliday Exercise: Course: AC557 Date: 1/30/2011 1. The agreement requires equal rental payments of $90,000 beginning on January 1, 2011. 2. The fair value of the building on January 1, 2011, is $550,000 $10,000 Kimberly-Clark depreciates similar buildings on the straight-line method. 4. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor. 6. The yearly rental payment includes $3,088.14 of executory costs related to taxes on the property. Instructions: Capitalized amount of the lease: Yearly payment 90,000.00 Executory costs 3,088.14 Minimum annual lease payment 86,911.86 Use the Excel Present Value (=PV) formula to determine the present value. Jan 1, 11 Capital Leases 550,000.00 Lease Liability 550,000.00 Jan 1, 11 Executory Costs 3,088.14 Lease Liability 86,911.86 Cash 90,000.00 Dec 31, 11 Depreciation Expense 55,000.00 Accumulated Depreciation 55,000.00 Dec 31, 11
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Excel_Project_4_James_Holliday - Name: James Holliday...

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