Business, 22.07.2020 23:01 mastsa

Castle Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Jan Way Company. The term of the non-cancel-able lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: a- Jan Way has the option to purchase the equipment for $16,000 upon the termination of the lease. It is not reasonably certain that Jan Way will exercise this option.
b- The equipment has a cost of $120,000 and a fair value of $160,000 to Castle Leasing. The useful economic life is 2 years, with a residual value of $16,000.
c- Castle Leasing desires to earn a return of 5% on its investment.
d- Collectibility of the payments by Castle Leasing is probable.
1. Prepare the journal entries on the books of Castle Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018.
2. Assuming that Jan Way exercises its option to purchase the equipment on December 31, 2018, prepare the journal entry to record the sale on Castle Leasing's books.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 22:00

When slick heating company switched to an activity based costing system, it realized that it was allocating a much lower percentage of factory overhead to a product line that the marketing department was trying to push. the product line may contain which type of products?

Answers: 2

Answer

Business, 22.06.2019 07:30

Read the following scenario and answer the question in 5-10 sentences. you are the owner of a small business that is a defendant in a lawsuit in federal court. you received bad news from your lawyer that the judge did not allow certain documents to be admitted as evidence in court and that the jury reached a $50,000 verdict in favor of the plaintiff. your lawyer tells you that it is within your legal right to hire him to file an appeal with the united states court of appeals. if the appellate court rules in your favor, you may be able to avoid paying part or all of the $50,000. evaluate your lawyer’s suggestion about appealing the decision.

Answers: 1

Answer

Business, 22.06.2019 09:00

Your grandmother told you a dollar doesn't go as far as it used to. she says the purchasing power of a dollar is much lesser than it used to be. explain what she means. try and use and explain terms like inflation and deflation in your answer.

Answers: 1

Answer

Business, 22.06.2019 13:40

Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.

Answers: 1

Answer

You know the right answer?

Castle Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to...

Questions