Exercise 21-8 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between...
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Exercise 21-8 (Part Level Submission) The following facts pertain to a noncancelable lease agreement between Ivanhoe Leasing Company and Shamrock Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $21,197.82 Bargain-purchase option price at end of lease term $4,200 Lease term 5 years Economic life of leased equipment 10 years Lessors cost $71,000 Fair value of asset at May 1, 2017 $91,000 Lessors implicit rate 10 % Lessees incremental borrowing rate 10 % The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. Click here to view factor tables Collapse question part (c) Prepare a lease amortization schedule for Shamrock Company for the 5-year lease term. The expected residual value of the equipment at the end of 5 (10) years is $12,000 ($0)
SHAMROCK COMPANY (Lessee) Lease Amortization Schedule
Date
Annual Lease Payment Plus BPO
Interest on Liability
Reduction of Lease Liability
Lease Liability
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