Lessor entries-sales-type lease wadkins company

Reference no: EM1338755

E21-6 (Lessor Entries, Sales-Type Lease) Wadkins Company, a machinery dealer, leased a machine to Romero Corporation on January 1, 2012. The lease is for an 8 -year period and requires equal annual payments of $38,514 at the beginning of each year. The first payment is received on January 1, 2012. Wadkins had purchased the machine during 2011 for $170,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Wadkins. Wadkins set the annual rental to ensure an 11% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Wadkins at the termination of the lease.

Instructions:
(a) Compute the amount of the lease receivable. (Use the Excel Present Value formula to solve (@PV)

Reference no: EM1338755

Questions Cloud

What position along the chord does minimum pressure occur : At what position along the chord does the minimum pressure occur? What is special about the point where C p is a maximum?

List two benefits to sexual reproduction : List two benefits to sexual reproduction, List two benefits to asexual reproduction, Explain what monogamy, polygyny, and polyandry are

Which forecasting technique would you consider : From the choice of simple moving average, weighted moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate? Why?

Leasing promulgations : Write down a guide for a 2- to 4-page paper comparing capital and operating leases (similarities and differences) and describe how each are classified on financial statements. Discuss how their classification and the changes in how they were repo..

Lessor entries-sales-type lease wadkins company : The lease is for an 8 -year period and requires equal annual payments of $38,514 at the beginning of each year. The first payment is received on January 1, 2012. Wadkins had purchased the machine during 2011 for $170,000. Compute the amount of th..

Acquisition of general capital assets : The entire debt arising from the acquisition of general capital assets under a capital lease agreement should be reported as debt of the fund that accounts for the activities of the department or function using the leased asset.

Explain the goal of a position paper is to convince audience : Explain The goal of a position paper is to convince the audience that your opinion is valid and worth listening to

Calculating going rate of interest on bonds : Suppose a car company sold an issue of bonds with a 10-year maturity, a $1,000 par value-Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 6%. At what price would the bonds sell?

Explain donald trumps success : Explain Donald Trumps Success and What obstacles were encountered in the formation and execution of the business

User Account

All Pages