At January 1,2021, Tom leased restaurant equipment from Linda Corporation under a five-year lease agreement...
90.2K
Verified Solution
Link Copied!
Question
Accounting
At January 1,2021, Tom leased restaurant equipment from Linda Corporation under a five-year lease agreement in a finance lease.The lease agreement specifies annual payments of $50,000 beginning January 1,2021, the beginning of the lease, and at each December 31 thereafter through 2024. The equipment was acquired recently by Linda at a cost of $240,000 and was expected to have a useful life of six years with no salvage value at the end of its life. Linda seeks a 4% return on its lease investments. The present value of five payments at a discount rate of 4% is $231,495. Based on the above fact, answer the following questions: 1.What amount related to the lease should Tom report in its income statement for the year ended December 31,2021? 2.What is the balance of lease liability that Tom will report in its balance sheet at December 31, 2021? 3.What is the balance of right-of-use asset that Andy will report in its balance sheet at December 31, 2021?
At January 1,2021, Tom leased restaurant equipment from Linda Corporation under a five-year lease agreement in a finance lease.The lease agreement specifies annual payments of $50,000
beginning January 1,2021, the beginning of the lease, and at each December 31 thereafter through 2024. The equipment was acquired recently by Linda at a cost of $240,000 and was expected to have a
useful life of six years with no salvage value at the end of its life. Linda seeks a 4% return on its lease investments. The present value of five payments at a discount rate of 4% is $231,495.
Based on the above fact, answer the following questions:
1.What amount related to the lease should Tom report in its income statement for the year ended December 31,2021?
2.What is the balance of lease liability that Tom will report in its balance sheet at December 31, 2021?
3.What is the balance of right-of-use asset that Andy will report in its balance sheet at December 31, 2021?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.