Applying New Lease Accounting Standards for Operating LeasesOn January 1 of the current year, CCH Corporation entered into the following lease contract. Based on the facts, CCH Corporation classifies the lease as an operating lease.Details of lease contract Leased assetOffice space Lease term5yearsAnnual lease payment$115,487 Upfront fees$10,000 Cost of debt capital5% a. Determine the amount of the lease liability that CCH will add to its balance sheet at the inception of the lease. Amount of lease liability b. What amount will be added to the balance sheet as an asset? Amount added as an asset The rest of the questions are given in pictures below. please answer all parts correctly. i will upvote. thank you!! d. Prepare a lease amortization schedule that shows the interest and principal portions of each lease payment.Implicit Interest(Lease Liability,Start x cost of debt)Lease Liability, End(Lease Liability, Start -Lease Amortization)Year1 $234(a)LO(b)5(c)Lease Liability,Start($ in millions)Transaction00000$Balance SheetCashAssete. Use the financial statement effects template to record (a) the lease inception and (b) lease payment for year one and for (c) year two of the lease term. Also show the asset and lease amortization for those sametwo years.0Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction.Note: Indicate a decrease in an account category by including a negative sign with the amount.♦000000$0Lease Amortization(Lease payment -Implicit interest)Noncash Assets0◆0 =00000◆$0 =Liabilities00000◆000Contrib. Capital +0◆0→0EarnedCapital0♦00Income StatementRevenues0◆¶00IExpenses000=NetIncome000 f. At the end of the current year, what additional disclosure would CCH make in its footnotes pertaining to the four remaining lease payments?December 202020212022202320242025ThereafterTotal undiscontinued lease paymentsImputed interestTotal Operating lease liabilityWeighted average remaining lease life in yearsWeighted average discount rate$$00000000000%

Lease accounting:Generally lease accounting is a process organizations uses to record the financial…

Applying New Lease Accounting Standards for Operating Leases On January 1 of the current year, CCH Corporation entered into the following lease contract. Based on the facts, CCH Corporation classifies the lease as an operating lease. Details of lease contract Leased asset Office space Lease term 5 years Annual lease payment $115,487 Upfront fees $10,000 Cost of debt capital 5% a. Determine the amount of the lease liability that CCH will add to its balance sheet at the inception of the lease. Amount of lease liability

Applying New Lease Accounting Standards for Operating Leases On January 1 of the current year, CCH Corporation entered into the following lease contract. Based on the facts, CCH Corporation classifies the lease as an operating lease. Details of lease contract Leased asset Office space Lease term 5 years Annual lease payment $115,487 Upfront fees $10,000 Cost of debt capital 5% a. Determine the amount of the lease liability that CCH will add to its balance sheet at the inception of the lease. Amount of lease liability

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 4RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...

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Details of lease contract
Leased asset	Office space
Lease term	5	years
Annual lease payment	$115,487
Upfront fees	$10,000
Cost of debt capital	5%

Similar questions

TOPIC: LEASESCompute for the following (show solution):a. Manufacturer's profit recognized in the year 2020.b. Total financial revenue pertaining to the lease.c. Interest Revenue recognized in the year 2020.d. Net Finance lease Receivable balance, December 31, 2020.
Wildhorse Manufacturing Ltd. has signed a lease agreement with Blossom Leasing Inc. to lease some specialized manufacturing equipment. The terms of the lease are as follows The lease is for 5 years commencing January 1, 2023 Wildhorse must pay Blossom $59,445 on January 1 of each year, beginning in 2023 Equipment of this type normally has an economic life of 6 years. Blossom has concluded based on its review of Wildhorse's financial statements, that there is no unusual credit risk in this situation Blossoms will not incur any further costs with regard to this leas Blossom purchases this equipment directly from the manufacturer at a cost of $225,329, and normally sells the equipment for $275,429 Wildhorse's borrowing rate is 7%. Blossom's impiled interest rate is 6%, which is known to Wildhorse at the time of negotiating the lease Wildhorse uses the straight-line method to depreciate similar equipment. Both Wildhorse and Blossom have calendar fiscal years (year end December 31), and…
On January 1, 2021, Robertson Construction leased several items of equipment under a two-year operating lease agreement from Jamison Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $47,000 each, payable semiannually on June 30 and December 31 each year. The equipment was acquired by Jamison. Leasing at a cost of $367,000 and was expected to have a useful life of five years with no residual value. Both firms record. amortization and depreciation semi-annually. Required: Prepare the appropriate journal entries for the lessor (Jamison Leasing) from the beginning of the lease through the end of 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Reporting Finance Lease, Guaranteed Residual-Lessee Mac Leasing Company (lessor) and Ash Corporation (lessee) signed a four-year lease on January 1 of Year 1. The underlying asset has an estimated life of six years and a fair value of $50,000, and the property reverts to Mac at the end of the lease term. Lease payments of $11,923 are payable on January 1 of each year beginning at the lease commencement and are set to yield Mac a return of 8%, which is known to Ash. The estimated residual value at the end of the lease term is $10,000 and is guaranteed by Ash Corporation. Ash expects the residual value at the end of the lease term to be $10,000. The lease contains no purchase option. Requireda. How would Ash Corporation classify the lease? Finance Lease b. What is the lease liability balance on January 1, the lease commencement date? Note: Round your answer to the nearest whole dollar. $ Estimated Residual = Guaranteed Residual, Estimated Residual < Guaranteed Residual Note: Round your…
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Regading the information in the screenshot, pease answer requirements 1-5. Thanks! Requirement #1 Calculate the present value of the lease payments and record the journal entry at lease inception for the lessee. Requirement #2 In the space below, prepare the lease amortization schedule. Requirement #3 Prepare the journal entries the lessee would record on January 1st 2022 and December 31st, 2022 for the first two $30,000 lease payments. Requirement #4 Determine the effect on Café Med's earnings (net income) for the first year (2022)? Requirement #5 Determine the balances relating to the lease (the lease payable & right-of-use asset) on Café Med's balance sheet as of December 31, 2022?
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