On January 1, 2021, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $957,600 and has an expected useful life of five years. Allied expects the residual value at December 31, 2024, will be $301,600 Negotiations led to the lessee guaranteeing a $341,600 residual value Equal payments under the finance/sales-type lease are $201.600 and are due on December 31 of each year with the first payment being made on December 31, 2021 Karrier is aware that Allied used a 4% interest rate when calculating lease payments (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 ond PVAD of S) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropriate entries for both Karrier and Allied on January 1, 2021, to record the lease. 2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease

On January 1, 2021, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $957,600 and has an expected useful life of five years. Allied expects the residual value at December 31, 2024, will be $301,600 Negotiations led to the lessee guaranteeing a $341,600 residual value Equal payments under the finance/sales-type lease are $201.600 and are due on December 31 of each year with the first payment being made on December 31, 2021 Karrier is aware that Allied used a 4% interest rate when calculating lease payments (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 ond PVAD of S) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropriate entries for both Karrier and Allied on January 1, 2021, to record the lease. 2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2021, related to the lease

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter15: Property Transactions: Nontaxable Exchanges

Section: Chapter Questions

Problem 46P

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On January 1, 2021, Central Industries leased a high-performance conveyer to Dynamic Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Central. The equipment cost Central $1,912,000 and has an expected useful life of five years. Central expects the residual value at December 31, 2025, will be $600,000. Negotiations led to the lessee guaranteeing a $680,000 residual value.Equal payments under the finance/sales-type lease are $400,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Dynamic is aware that Central used a 5% interest rate when calculating lease payments. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Prepare the appropriate journal entries for both Dynamic and Central on January 1, 2021, to record the lease.2. Prepare all appropriate journal entries for both Dynamic and Central…
On January 1, 2021, Central Industries leased a high-performance conveyer to Dynamic Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Central. The equipment cost Central $1,912,000 and has an expected useful life of five years. Central expects the residual value at December 31, 2025, will be $600,000. Negotiations led to the lessee guaranteeing a $680,000 residual value. Equal payments under the finance/sales-type lease are due on December 31 of each year with the first payment being made on December 31, 2021. Dynamic is aware that Central used a 5% interest rate when calculating lease payments.What is the amount that the lessee will record as Right-of-use-Asset and Lease Liability ?
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On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. The equipment cost Ghosh $957,000 and has an expected useful life of five years. Ghosh expects the residual value at December 31, 2027, will be $301, 000. Negotiations led to the lessee guaranteeing a $341, 000 residual value. Equal payments under the finance/sales - type lease are $201,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Karrier is aware that Ghosh used a 4% interest rate when calculating lease payments.
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