60.1K

Verified Solution

Link Copied!

LUUUU and reported on the balance sheet (not notes) at December 31, 2017, for both the the P21-4 celable (LO2,4) ExCEL (Balance sheet and Income statement Disclosure Lessee) The following pertain an lease agreement between Alschuler Leasing Company and Mckee Electronics, a lessee, for a computer system. Inception date Le Re October 1, 2017 Lease term Economic life of leased equipment Fair value of asset at October 1, 2017 Residual value at end of lease term Lessor's implicit rate 10% Lessee's incremental borrowing rate 10% Annual lease payment due at the beginning of each year, beginning with October 1,2017 $62,700 The collectibility of the lease payments is reasonably predictable, and are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee responsibility for there costs, which amount to$5,500 per year and are executory to be paid each October 1, beginning October 1,2017. This $5,500 is not included in the rental payment of $62700)The asset will revert to the lessor at the end of the lease term. The straight-line depreciation method is used for all equipment. The following amortization schedule has been prepared correctly for use by both the lessor and the lessee in accounting for this lease. The lease is to be accounted for properly as a capital lease by the lessee and as a direct-financing lease by the lessor. Balance of Interest (10%) on Unpaid of Lease Payment Date Receipt Liability/Receivable Liability/Receivable Liability/Receivable $300,383 10/01/17 62,700 237,683 10/01/17 62,700 198,751 $23,768 10/01/18 155,926 19,875 10/01/19 47,107 108,819 15,593 10/01/20 51,818 10,882 10/01/21 10/01/22 $75,817 $376,200 *Rounding error is$1. Instructions do on Gentember 30, answer the following questions with respect to this

Answer & Explanation Solved by verified expert

See Answer