There is no option to negotiate for renewal provided in the lease agreement. The following provisions presented in the lease agreement will be evaluated whether the costs are included in minimum lease payments. 1. Under the lease agreement, Lucas performs general repair and maintenance on the leased premises. Stated that the lease is a capital lease, under ASC 840-30-30-1, “The lessee shall measure a capital lease asset and capital lease obligation initially at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term excluding that portion of the payments representing executory costs (such as insurance, maintenance, and taxes to be paid by the lessor) including any profit thereon.” This passage informs us that Lucas excludes executory cost.
| | | present value of future lease payments as an asset and also showing this same amount as an offsetting liability. | | | undiscounted sum of future lease payments as an asset and as an offsetting liability. | | | undiscounted sum of future lease payments, less the residual value, as an asset and as an offsetting liability. | 8 points Question 3 Which of the following statements is most CORRECT? Answer | | If new debt is used to refund old debt, the correct discount rate to use in the refunding analysis is the before-tax cost of new debt.
manuf cost 250000 6) Kingdom Leasing, Inc. Incurred costs of $6500 in negotiating and closing the lease. There are no uncertainties regarding additional costs yet to be incurred and the collectibility of the lease payments is reasonably predictable. lease neg 6500 Required: PV res value 11566.2 a) Determine what type of lease this would be for the lessor and calculate the following: (show all work) $238,434 Lease Receivable Sales Price Cost of Sales b) Prepare Kingdom's amortization schedule for the lease terms. c) Prepare all the journal entries for Kingdom for 2012.
Therefore, NeedsSpace should amortize the leasehold improvements over ten years. Assuming WeHaveIt exercises the second provision when the lease term expires, NeedsSpace is contractually obligated to remove the leasehold improvements (410-20-15-3e). NeedsSpace will then recognize the fair value of the liability as an asset retirement obligation (ARO) in the period it is incurred and reasonably estimable (ASC 410-20-25-4). Since the liability is recognized as an ARO, we record the liability in conjunction with the amortized leasehold improvements (ASC
(FASB 835-30-25) (c.) Long Term Obligations- Long-term obligations are those scheduled to mature beyond one year (or the operating cycle, if applicable) from the date of an entity's balance sheet. (FASB 470-10-20) (d.) Effective Interest Rate- The rate of return implicit in the loan, that is, the contractual interest rate adjusted for any net deferred loan fees or costs, premium, or discount existing at the origination or acquisition
The retained earnings statement reconciles the beginning and ending balances of the retained earnings. Some organizations sometimes combine it with the income statement. The final amount of the retained earnings is the ending balance, which indicates why the earnings may have increased or decreased for that period. If there is a net loss, the loss is deducted from the dividends in the retained earnings (Weygandt, 2008). As for the balance sheet, it shows the assets, liabilities, and stockholder’s equity for a specified date.
What is the project’s payback period? 4.28 years b. What is the rationale behind the use of payback as a project evaluation tool? A project’s payback period lets investors know how long it will take to make their initial investment back. This determines the point in which a profit begins to be turned.
I/WE UNDERSTAND THAT KINGS AND QUEENS LEASING LLC AND ANY OF ITS AGENTS IS AND/ARE AGENTS OF THE LANDLORD AND IS A PAID REPRESENTATIVE OF THE LANDLORD. I/WE ACKNOWLEDGE THAT THIS WRITTEN NOTICE WAS RECEIVED BEFORE I/WE RECEIVED A LEASE AGREEMENT. 2. IT IS AGREED THAT UPON EXECUTION OF THE LEASE BY APPLICANTS, SAID APPLICANTS SHALL DEPOSIT WITH THE LANDLORD AND/OR ITS AGENT A SUM EQUIVALENT TO FIRST MONTH’S RENT, REPRESENTING RENT IN ADVANCE AND/OR SECURITY. RENT: $_____________________________ SECURITY: $_____________________________ 3.
Prepaid expenses are costs that have been paid but that apply to future periods or to the production of future revenue. Examples include insurance, rent, taxes, patent, trademark and copyright. When designing the audit program the auditor should consider the nature of prepaid account balances and the risks associated with transactions flowing through the accounts. Also other assets that provide economic benefit for less than a year are classified as current assets and are called prepaid expenses. When preparing this program the auditor should consider and design audit procedures that address relevant presentation and disclosure requirements.