1 answer

On December 31, 2018, Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period...

Question:

On December 31, 2018, Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period ending December 31, 2022, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost Rhone-Metro $302,915 and has an expected useful life of six years. Its normal sales price is $302,915. The lessee-guaranteed residual value at December 31, 2022, is $17,000. Equal payments under the lease are $80,000 and are due on December 31 of each year. The first payment was made on December 31, 2018. Western Soya’s incremental borrowing rate is 11%. Western Soya knows the interest rate implicit in the lease payments is 7%. Both companies use straight-line depreciation. (Use appropriate factor(s) from the tables provided.)

TABLE 2 Present Value of $1 PV = $1. n/i 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 0.0% 10.0% 11.0% 12TABLE 6 Present Value of an Annuity Due of $1 PVAD ={ 19+ if]*(1 + i) 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% n

Guaranteed Residual Value Table or calculator function: PV of $1 $ Amount to be recovered Less: Present value of the guarante

Required:
5. Prepare all appropriate entries for both Western Soya and Rhone-Metro on December 31, 2019 (the second lease payment and depreciation).

Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 l 6. Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 31, 2022 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,200.

Required 1 Required 2 Required 3 lessee Required 3 lessor Required 4 lessor Required 4 lessee Required 5 lessee Required 5 leX Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

TABLE 2 Present Value of $1 PV = $1. n/i 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 0.0% 10.0% 11.0% 12.0% 20.0% 1 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94787 0.94340 0.93458 2 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89845 0.89000 0.87344 3 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.85161 0.83962 0.81630 4 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856 0.82270 0.80722 0.79209 0.76290 5 0.95147 0.92826 0.90573 0.88385 0.86261 0.84197 0.82193 0.80245 0.78353 0.76513 0.74726 0.71299 0.92593 0.85734 0.79383 0.73503 0.68058 0.91743 0.909090.90090 0.89286 0.84168 0.82645 0.81162 0.79719 0.77218 0.75131 0.73119 0.71178 0.70843 0.68301 0.65873 0.63552 0.64993 0.62092 0.59345 0.56743 0.83333 0.69444 0.57870 0.48225 0.40188 6 0.94205 0.91454 0.88797 0.86230 0.83748 0.81350 0.79031 0.76790 0.74622 0.72525 0.70496 0.66634 7 0.93272 0.90103 0.87056 0.84127 0.81309 0.78599 0.75992 0.73483 0.71068 0.68744 0.66506 0.62275 8 0.92348 0.88771 0.85349 0.82075 0.78941 0.75941 0.73069 0.70319 0.67684 0.65160 0.62741 0.58201 9 0.91434 0.87459 0.83676 0.80073 0.76642 0.73373 0.70259 0.67290 0.64461 0.61763 0.59190 0.54393 10 0.90529 0.86167 0.82035 0.78120 0.74409 0.70892 0.67556 0.64393 0.61391 0.58543 0.55839 0.50835 0.63017 0.58349 0.54027 0.50025 0.46319 0.59627 0.56447 0.54703 0.51316 0.50187 0.46651 0.46043 0.42410 0.42241 0.38554 0.53464 0.48166 0.43393 0.39092 0.35218 0.50663 0.45235 0.40388 0.36061 0.32197 0.33490 0.27908 0.23257 0.19381 0.16151 11 0.89632 0.84893 0.80426 0.76214 0.72242 0.68495 0.64958 0.61620 0.58468 0.55491 0.52679 0.47509 12 0.88745 0.83639 0.78849 0.74356 0.70138 0.66178 0.62460 0.58966 0.55684 0.52598 0.49697 0.44401 13 0.87866 0.82403 0.77303 0.72542 0.68095 0.63940 0.60057 0.56427 0.53032 0.49856 0.46884 0.41496 14 0.86996 0.81185 0.75788 0.70773 0.66112 0.61778 0.57748 0.53997 0.50507 0.47257 0.44230 0.38782 15 0.86135 0.79985 0.74301 0.69047 0.64186 0.59689 0.55526 0.51672 0.48102 0.44793 0.41727 0.36245 0.42888 0.39711 0.36770 0.34046 0.31524 0.38753 0.35049 0.35553 0.31863 0.32618 0.28966 0.29925 0.26333 0.27454 0.23939 0.31728 0.28584 0.25751 0.23199 0.20900 0.28748 0.25668 0.22917 0.20462 0.18270 0.13459 0.11216 0.09346 0.07789 0.06491 16 0.85282 0.78803 0.72845 0.67362 0.62317 0.57671 0.53391 0.49447 0.45811 0.42458 0.39365 17 0.84438 0.77639 0.71416 0.65720 0.60502 0.55720 0.51337 0.47318 0.43630 0.40245 0.37136 18 0.83602 0.76491 0.70016 0.64117 0.58739 0.53836 0.49363 0.45280 0.41552 0.38147 0.35034 19 0.82774 0.75361 0.68643 0.62553 0.57029 0.52016 0.47464 0.43330 0.39573 0.36158 0.33051 20 0.81954 0.74247 0.67297 0.61027 0.55368 0.50257 0.45639 0.41464 0.37689 0.34273 0.31180 0.33873 0.31657 0.29586 0.27651 0.25842 0.29189 0.27027 0.25025 0.23171 0.21455 0.25187 0.21763 0.23107 0.19784 0.21199 0.17986 0.19449 0.16351 0.17843 0.14864 0.18829 0.16312 0.16963 0.14564 0.15282 0.13004 0.13768 0.11611 0.12403 0.10367 0.05409 0.04507 0.03756 0.03130 0.02608 21 0.81143 0.73150 0.65978 0.59539 0.53755 0.48557 0.43883 0.39679 0.35894 0.32486 0.29416 0.24151 24 0.78757 0.69954 0.62172 0.55288 0.49193 0.43796 0.39012 0.34770 0.31007 0.27666 0.24698 0.19715 25 0.77977 0.68921 0.60953 0.53939 0.47761 0.42315 0.37512 0.33273 0.29530 0.26223 0.233000.18425 28 0.75684 0.65910 0.57437 0.50088 0.43708 0.38165 0.33348 0.29157 0.25509 0.22332 0.19563 0.15040 29 0.74934 0.64936 0.56311 0.48866 0.42435 0.36875 0.32065 0.27902 0.24295 0.21168 0.18456 0.14056 0.19866 0.15770 0.14602 0.11591 0.10733 0.16370 0.13513 0.12640 0.10153 0.11597 0.09230 0.08955 0.06934 0.08215 0.06304 0.11174 0.08170 0.07361 0.05382 0.04849 0.09256 0.06588 0.05882 0.04187 0.03738 0.02174 0.01258 0.01048 0.00607 0.00506 30 0.74192 0.63976 0.55207 0.47674 0.41199 0.35628 0.30832 0.26700 0.23138 0.20064 0.17411 0.13137 31 0.73458 0.63031 0.54125 0.46511 0.39999 0.34423 0.29646 0.25550 0.22036 0.19018 0.16425 0.12277 40 0.67165 0.55126 0.45289 0.37243 0.30656 0.25257 0.20829 0.17193 0.14205 0.11746 0.09722 0.06678 0.09938 0.07537 0.09202 0.06915 0.04603 0.03184 0.05731 0.05210 0.02209 0.04368 0.03338 0.03935 0.02980 0.01538 0.01075 0.00421 0.00351 0.00068
TABLE 6 Present Value of an Annuity Due of $1 PVAD ={ 19+ if]*(1 + i) 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% n/i 1 2 3 4 5 1.0% 1.00000 1.99010 2.97040 3.94099 4.90197 1.5% 1.00000 1.98522 2.95588 3.91220 4.85438 2.0% 1.00000 1.98039 2.94156 3.88388 4.80773 2.5% 1.00000 1.97561 2.92742 3.85602 4.76197 3.0% 1.00000 1.97087 2.91347 3.82861 4.71710 3.5% 1.00000 1.96618 2.89969 3.80164 4.67308 4.0% 1.00000 1.96154 2.88609 3.77509 4.62990 4.5% 1.00000 1.95694 2.87267 3.74896 4.58753 1.00000 1.95238 2.85941 3.72325 4.54595 1.00000 1.94787 2.84632 3.69793 4.50515 1.00000 1.94340 2.83339 3.67301 4.46511 1.00000 1.00000 1.00000 1.93458 1.92593 1.91743 2.808022.78326 2.75911 3.62432 3.57710 3.53129 4.38721 4.312134.23972 1.00000 1.00000 1.00000 1.00000 1.90909 1.90090 1.89286 1.83333 2.73554 2.71252 2.69005 2.52778 3.48685 3.44371 3.40183 3.10648 4.16987 4.10245 4.03735 3.58873 6 7 8 9 10 5.85343 6.79548 7.72819 8.65168 9.56602 5.78264 5.71346 5.64583 6.69719 6.60143 6.50813 7.59821 7.471997.34939 8.48593 8.32548 8.17014 9.36052 9.16224 8.97087 5.57971 6.41719 7.23028 8.01969 8.78611 5.51505 6.32855 7.11454 7.87396 8.60769 5.45182 6.24214 7.00205 7.73274 8.43533 5.38998 5.32948 6.15787 6.07569 6.89270 6.78637 7.595897.46321 8.26879 8.10782 5.27028 5.99553 6.68297 7.33457 7.95220 5.21236 5.10020 4.99271 4.88965 5.91732 5.76654 5.62288 5.48592 6.58238 6.389296.20637 6.03295 7.20979 6.97130 6.74664 6.53482 7.80169 7.51523 7.24689 6.99525 4.79079 4.69590 4.60478 3.99061 5.35526 5.23054 5.11141 4.32551 5.86842 5.71220 5.56376 4.60459 6.33493 6.14612 5.96764 4.83716 6.75902 6.53705 6.32825 5.03097 11 10.47130 10.22218 9.98259 9.75206 9.53020 9.31661 9.11090 8.91272 8.72173 8.537638.360098.02358 12 11.36763 11.07112 10.78685 10.51421 10.25262 10.00155 9.76048 9.52892 9.30641 9.09254 8.88687 8.49867 13 12.25508 11.90751 11.57534 11.25776 10.95400 10.66333 10.38507 10.11858 9.86325 9.61852 9.38384 8.94269 14 13.13374 12.73153 12.34837 11.98318 11.63496 11.30274 10.98565 10.68285 10.39357 10.11708 9.85268 9.35765 15 14.00370 13.54338 13.10625 12.69091 12.29607 11.92052 11.56312 11.22283 10.89864 10.58965 10.29498 9.74547 7.71008 8.13896 8.53608 8.90378 9.24424 7.41766 7.80519 8.16073 8.48690 8.78615 7.14457 6.88923 6.65022 5.19247 7.49506 7.20652 6.93770 5.32706 7.81369 7.49236 7.19437 5.43922 8.10336 7.74987 7.42355 5.53268 8.36669 7.98187 7.62817 5.61057 16 14.86505 14.34323 13.84926 13.38138 12.93794 12.51741 12.11839 11.73955 11.37966 11.03758 10.71225 10.10791 9.55948 17 15.71787 15.13126 14.57771 14.05500 13.56110 13.09412 12.65230 12.23402 11.83777 11.46216 11.10590 10.44665 9.85137 18 16.56225 15.90765 15.29187 14.71220 14.16612 13.65132 13.16567 12.70719 12.27407 11.86461 11.47726 10.76322 10.12164 19 17.39827 16.67256 15.99203 15.35336 14.75351 14.18968 13.65930 13.15999 12.68959 12.24607 11.82760 11.05909 10.37189 20 18.22601 17.42617 16.67846 15.97889 15.32380 14.70984 14.13394 13.59329 13.08532 12.60765 12.15812 11.33560 10.60360 9.060698.60608 8.19087 7.81086 5.67547 9.31256 8.82371 8.37916 7.97399 5.72956 9.54363 9.02155 8.54879 8.11963 5.77463 9.75563 9.20141 8.70162 8.24967 5.81219 9.95011 9.36492 8.83929 8.36578 5.84350 21 19.04555 18.16864 17.35143 16.58916 15.87747 15.21240 14.59033 14.00794 13.46221 12.95038 12.46992 11.59401 10.81815 10.12855 9.51356 8.96333 8.46944 5.86958 25 22.24339 21.03041 19.91393 18.88499 17.93554 17.05837 16.24696 15.49548 14.79864 14.15170 13.55036 12.46933 11.52876 10.70661 9.98474 9.34814 8.78432 5.93710 30 26.06579 24.37608 22.84438 21.45355 20.18845 19.03577 17.98371 17.02189 16.14107 15.33310 14.59072 13.27767 12.15841 11.19828 10.36961 9.65011 9.02181 5.97472 40 33.16303 30.36458 27.90259 25.73034 23.80822 22.10250 20.58448 19.22966 18.01704 16.92866 15.94907 14.26493 12.87858 11.72552 10.75696 9.93567 9.23303 5.99592
Guaranteed Residual Value Table or calculator function: PV of $1 $ Amount to be recovered Less: Present value of the guaranteed residual value Amount to be recovered through periodic lease payments 7% Present Value 302,915 12,969 289,946 Lease Payments Table or calculator function: n = PVAD of $1 4 7% Lease Payments 80,000 Lease payments at the beginning of each of the next four years
Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 lessee Required 3 lessor Required 4 lessor Required 4 lessee Required 5 lessee Required 5 lessor Required 6 lessee Required 6 lessor Prepare all appropriate entries for Western Soya on December 31, 2019 (the second lease payment and depreciation). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No General Journal Debit Credit 1 Date December 31, 201 Lease payable Interest expense Cash 65,304 14,696 80,000 72,487 X December 31, 201 Depreciation expense Accumulated depreciation 72,487 X
Required 1 Required 2 Required 3 lessee Required 3 lessor Required 4 lessor Required 4 lessee Required 5 lessee Required 5 lessor Required 6 lessee Required 6 lessor Prepare the appropriate entries for both Western Soya on December 31, 2022 assuming the equipment is returned to Rhone- Metro and the actual residual value on that date is $1,200. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit 72,487 X December 31, 202 Depreciation expense Accumulated depreciation 72,487 X December 31, 202 Depreciation expense Accumulated depreciation * ®
X Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 lessee Required 3 lessor Required 4 lessor Required 4 lessee Required 5 lessee Required 5 lessor Required 6 lessee Required 6 lessor Prepare the appropriate entries for Rhone-Metro on December 31, 2022 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,200. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Credit 1 Date General Journal December 31, 202 Right-of-use asset Loss on leased assets Lease receivable Interest revenue Debit 1,200 15,800 15,888 1,112 Required 6 lossen

Answers

Lease amortization schedule
Date Lease
payment
Interest
expense
Decrease
in lease
payable
Lease
payable
a b=(Lease
payable
* 7%)
c=a-b d=prev. balance-c
Dec 31,2018 302915
Dec 31,2018 80000 0 * 80000 222915
Dec 31,2019 80000 15604 64396 158519
Dec 31,2020 80000 11096 68904 89615
Dec 31,2021 80000 6273 73727 15888
Dec 31,2022 17000 1112 15888 0
* Since payment made at the inception of lease, no interest expense
Residual value=$ 17000
5 Western soya co. (Lessee)
Date General Journal Debit Credit
Dec 31,2019 Interest expense 15604
Lease payable 64396
Cash 80000
(Second lease payment made)
Depreciation expense (Note:1) 71479
Accumulated depreciation 71479
(Depreciation recorded)
Rhone metro (Lessor)
Date General Journal Debit Credit
Dec 31,2019 Cash 80000
Lease receivable 64396
Interest revenue 15604
(second lease payment received)
Note:1
Depreciation under straight line method=(Cost-residual value)/Useful life of the asset
Here, useful life of asset=Lease term=4 years
Depreciation under straight line method=(302915-17000)/4=$ 71479
6 Western soya co. (Lessee)
Date General Journal Debit Credit
Dec 31,2022 Depreciation expense (Note:1) 71479
Accumulated depreciation 71479
(Depreciation recorded)
Interest expense 1112
Lease payable 15888
Accumulated depreciation (71479*4) 285915
Loss on residual value (17000-1200) 15800
Leased equipment 302915
Cash (17000-1200) 15800
(Lease account closed)
Rhone metro (Lessor)
Date General Journal Debit Credit
Dec 31,2022 Equipment (Actual residual value) 1200
Cash (17000-1200) 15800
Lease receivable 15888
Interest revenue 1112
(Lease account closed)
.

Similar Solved Questions

1 answer
[Review Topical References Use the References to access important values if needed for this question. Use...
[Review Topical References Use the References to access important values if needed for this question. Use the pull-down boxes to specify states such as (aq) or (8) If a box is not needed leave it blank. When aqueous solutions of potassium acetate and hydrobromic acid are mixed, an aqueous solution o...
1 answer
Problem I: (Each answer should not exceed 6 to 8 lines) (a) What is Comet and...
Problem I: (Each answer should not exceed 6 to 8 lines) (a) What is Comet and what was the primary reason for its failure (explosion)? (b) In what way the Continental Airlines and its Mechanic were involved in the disaster of the world's first supersonic transport aircraft in the year 2000? (c) ...
1 answer
FML Company in the U.S. has just signed a contract to purchase light rail cars from...
FML Company in the U.S. has just signed a contract to purchase light rail cars from a manufacturer in Germany for euro 2,500,000. The purchase was made in June with payment in euro due six months later in December. Assume that in December, the axchange rate turns out to be as the company anticipated...
1 answer
Problems 3. The diagram labeled “Before Reaction" depicts a mixture of S and O2 (molecules in...
Problems 3. The diagram labeled “Before Reaction" depicts a mixture of S and O2 (molecules in a closed container a. Draw a diagram that depicts the results after the mixture reacts as completely as possible according to the equation: 2S + 302 → 2803. Note that matter should be conserv...
1 answer
4. A hydrogen atom is excited by causing an electronic transition from (i) n = 2...
4. A hydrogen atom is excited by causing an electronic transition from (i) n = 2 to n3 and (ii) n=1 to n = 2 principle energy level. a) Which case needs more energy, (i) or (ii)? Why? b) If light is used as the energy source, which case absorbs a light with a longer wavelength? Why?...
1 answer
Part A Alaser pulse with a wavelength of 510 nm contains 4.85 mJ of energy. How...
Part A Alaser pulse with a wavelength of 510 nm contains 4.85 mJ of energy. How many photons are in the laser pulse? Express the number of photons numerically. View Available Hint(s) TE IVO ALDA ? N = Submit...
1 answer
How do you simplify #sqrt((-3)(-12))#?
How do you simplify #sqrt((-3)(-12))#?...
1 answer
Help is 4?? b. A founder event, using the founder event as the reference generation and...
Help is 4?? b. A founder event, using the founder event as the reference generation and calculating the effective sizes 10 generations later, during which time the population grew at a rapid rate. (4 pts) c. A steadily declining population size? (4 pts) 4. Given the following allele frequencies for ...
1 answer
Tax help!!!! lem (Tax Return Jones have n age from 51. Comprehensive Problem (Tax R Problem)....
Tax help!!!! lem (Tax Return Jones have n age from 51. Comprehensive Problem (Tax R Problem). Rodney and Alice Jones shree small children, ranging in a to 10. One child is blind and ne care. Rodney works as an accounta lange CPA firm and has gross inco. $45,000. Alice is a lawyer with a na law fi...
1 answer
On average Tempe, AZ gets rain 29 days a year (out of 365 days). Your weather...
On average Tempe, AZ gets rain 29 days a year (out of 365 days). Your weather app is predicting rain tomorrow. The app isn't perfect though. It only predicts that it will rain around 90% of the time that it actually does rain, and it will predict rain about 6% of the time that it doesn't rai...
2 answers
The senior class is taking a trip to an amusement park. For every 3 tickets they purchased they received one free ticket. 3 tickets cost #$53.25#. The total purchase of tickets cost #$1384.50#. How many tickets did they receive?
The senior class is taking a trip to an amusement park. For every 3 tickets they purchased they received one free ticket. 3 tickets cost #$53.25#. The total purchase of tickets cost #$1384.50#. How many tickets did they receive?...
1 answer
When creating the operating section of the cash flow statement using the indirect method are the...
When creating the operating section of the cash flow statement using the indirect method are the following adjustments added to Net Income or subtracted from Net Income? Depreciation expense (Select] Gain on sale of long-term asset [Select ] Loss on sale of long-term asset (Select] Increase in short...
2 answers
# Research the topic of Job Satisfaction using the Business Source Premier Database (EBSCO) and/or the ABI Inform Global database in the Library using the instructions linked here
# Research the topic of Job Satisfaction using the Business Source Premier Database (EBSCO) and/or the ABI Inform Global database in the Library using the instructions linked here.# Provide a summary of the research article. Include a hypothesis null and hypothesis alternate statement for an ANOVA p...
1 answer
A portable electric fan is operating by a 9V battery. The current going through the motor...
A portable electric fan is operating by a 9V battery. The current going through the motor is 160mA. Determine the resistance of the fan. * 0.056 ohms 56 ohms 560 ohms 1440 ohms...
3 answers
How do you simplify #(sqrt5-3)^2#?
How do you simplify #(sqrt5-3)^2#?...
1 answer
T DETAIL T37 T T4 D2 P2 DI EAD DETAIL P1 (N) P2 (N) L1 (mm)...
T DETAIL T37 T T4 D2 P2 DI EAD DETAIL P1 (N) P2 (N) L1 (mm) L2 (mm) 735 720 125 140 L3 (mm) L4 (mm) 65 120 D1 (mm) 30 D2 (mm) T1 (mm) 20 6 T2 (mm) T3 (mm) T4 (mm) 12 16 4.55 Material Tee Monel Metal Material Pipe Stainless Steel Calculate the Y- Deflection at the P1 loading region per the given cond...