Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, year 1, kristoph enterprises manufac

On January 1, Year 1, Kristoph Enterprises manufactured a piece of equipment with a cost...

50.1K

Verified Solution

Question

Accounting

image
image
On January 1, Year 1, Kristoph Enterprises manufactured a piece of equipment with a cost of $325,000 and a fair value of $412,500. On that date, Kristoph Enterprises leases the asset to Valera Mango Company at fair value for a 4-year term at an interest rate of 9%. The annual lease payment is due at the beginning of each year, and the first payment is to be collected at the inception date. The leased asset will revert back to Kristoph Enterprises at the end of the lease term. The equipment has an estimated residual value of $15,000 which is not guaranteed by the lessee. The asset has an estimated useful life of 4 years. Both Kristoph Enterprises and Valera Mango Company have a calendar-year reporting period. Part 2. Go back to the original set of facts with one exception: Assume that the asset has an estimated residual value of $15,000, which is guaranteed by the lessee. The lessee expects the fair value of the asset to be $8,500 at the end of the lease. 1A. Compute the amount of the annual lease payments to be collected by the lessor. 1B. Prepare the amortization schedule for this lease for the Lessor and Lessee

Answer & Explanation Solved by verified expert
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!
Become a Member

Other questions asked by students

Q

A professional sports league claims that the average age of players in the league is 28...

Statistics
Q

Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis...

Accounting
Q

4 Where would a green bug be most likely to survive a sandy beach a...

Biology
Q

What is the relationship entrepreneurship and between private ownership of the factors of production Entrepreneurs...

Biology
Q

The capacitor in the figure below is designed to filter low frequency signals impeding their...

Physics
Q

For the next 5 minutes become familiar with the simulation Change various features such as...

Physics
Q

Malaya is making a collage of her birthday party photos and she wants to add...

Basic Math
Q

Exercise 9-12 (Algo) Revenue and Spending Variances [LO9-3] Lavage Rapide owns and operates a large...

Accounting
Q

1. Agee Storage issued 35 million shares of its $1 common stock at $16...

Accounting
Q

1. As of February 2010, what is your assessment of the worth of Wal-Mart's stock?...

Accounting
Q

1) Given the following operating ratios, explain their possible use in a managerial situation for...

Finance
Q

Hi, the following question is in the subject of Financial performance management, it starts with...

Finance