ORIE 3150 Homework #6 Fall 2011 draft

ORIE 3150 Homework #6 Fall 2011 draft - ORIE 3150 Homework...

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ORIE 3150 Homework #6 Due October 26, 2011 You may wish to keep a copy of this homework as it may not be returned to you in time for Prelim II. 1. Eureka Corporation leased a surface etcher from Callahan Industries. Eureka agreed to pay $4,525.60 per quarter for 5 years to lease the machine. There was neither an ownership transfer nor a bargain purchase option. The useful life of the machine was 8 years, with a residual value of zero. The annual interest rate was 8%, and the fair market value of the machine was $74,000. The machine was delivered and the lease was signed on January 1, 2009. Depreciation was straight line, full-year, recorded quarterly. a. Show the journal entry or entries Eureka Corporation must make on March 31, 2009 related to the lease. b. Show the journal entry or entries Callahan Industries must make on March 31, 2009 related to the lease. 2. Camelrock Corporation entered into a capital lease agreement on January 1, 2009. The amount recorded under Leased Asset at that time was $143,900, and the term of the lease was 6 years. There was no ownership transfer or bargain purchase option. The salvage value was negligible, and the full-year depreciation method was used. The
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This note was uploaded on 12/11/2011 for the course ORIE 3150 taught by Professor Callister during the Fall '08 term at Cornell University (Engineering School).

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ORIE 3150 Homework #6 Fall 2011 draft - ORIE 3150 Homework...

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