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week 4 excel assignment

week 4 excel assignment - Tara Anderson 15-57 1 2008 Jan 2...

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Tara Anderson 15-57 1 Astle Manufacturing Company Books (Lessor): 2008 Jan 2. Lease Payments Receivable 187176 Sales Cost of Goods Sold 120000 Inventory To record lease. COMPUTATIONS: HINT - Sales (present value of annual lease payments + Present value of guaranteed residual amount): Present value of annual lease payments: PMT = N = I = PV = Present value of guaranteed residual amount: PV = $60,000(PVF ) FV PV = $60,000(0.5645) N = PV = $33,870 I = or with a business calculator: PV = Make sure to toggle back so that the payments are assumed to occur at the end (END) of the period. TPV Jan 2. Cash 33,500 Lease Payments Receivable Executory Costs Received first lease payment. Dec 31. Cash 33,500 Interest Revenue Lease Payments Receivable Deferred Executory Costs Received second lease payment. HINT: $187,176 - $32,000 = $155,176 (Interest Revenue) $155,176 0.10 = $15,518 Haws Industries Co. Books (Lessee): 2008 Jan 2. Rent Expense 33500 Cash Paid lease payment for 2008. [Note: The lease is a capital lease (sales-type) for the lessor because the sum of the present value of lease payments and the guaranteed residual value is equal to the fair market value of the asset ($187,176).]
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Dec 31. Prepaid Rent 33,500 Cash Paid lease payment for 2009. 2 Astle Manufacturing Co. Dec 31. Balance Sheet (Partial) Assets Current assets: Lease payments receivable-current portion Noncurrent assets:
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