On lang corporation leased a ship from fort company

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61. On December 31, 2011, Lang Corporation leased a ship from Fort Company for an eight- year period expiring December 30, 2019. Equal annual payments of $200,000 are due on December 31 of each year, beginning with December 31, 2011. The lease is properly classified as a capital lease on Lang 's books. The present value at December 31, 2011 of the eight lease payments over the lease term discounted at 10% is $1,173,685. Assuming all payments are made on time, the amount that should be reported by Lang Corporation as the total obligation under capital leases on its December 31, 2012 balance sheet is a. $1,091,054. b. $1,000,159. c. $871,054. d. $1,200,000. Use the following information for questions 62 and 63. On January 1, 2011, Sauder Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Sauder to make annual payments of $50,000 at the beginning of each year for five years with title to pass to Sauder at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Sauder uses the straight-line method of depreciation for all of its fixed assets. Sauder accordingly accounts for this lease transaction as a capital lease. The minimum lease payments were determined to have a present value of $208,493 at an effective interest rate of 10%. 62. In 2011, Sauder should record interest expense of 63. In 2012, Sauder should record interest expense of 21 - 14
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Accounting for Leases 64. On December 31, 2011, Kuhn Corporation leased a plane from Bell Company for an eight-year period expiring December 30, 2019. Equal annual payments of $150,000 are due on December 31 of each year, beginning with December 31, 2011. The lease is properly classified as a capital lease on Kuhn’s books. The present value at December 31, 2011 of the eight lease payments over the lease term discounted at 10% is $880,264. Assuming the first payment is made on time, the amount that should be reported by Kuhn Corporation as the lease liability on its December 31, 2011 balance sheet is Use the following information for questions 65 and 66. On January 1, 2011, Ogleby Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Ogleby to make annual payments of $60,000 at the end of each year for five years with title to pass to Ogleby at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Ogleby uses the straight-line method of depreciation for all of its fixed assets. Ogleby accordingly accounts for this lease transaction as a capital lease. The minimum lease payments were determined to have a present value of $227,448 at an effective interest rate of 10%.
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