Amount of equipment, accumulated depreciation, lease payables
Not what you're looking for?
Quattro Corporation signed a lease from Cinco Leasing Company of July 1, 20X3, for equipment having a five-year useful life. The lease does not include any option to purchase the equipment at the end of the four-year lease term, nor does it include a provision for ownership transfer. Five equal payments of $10,000 per year are required by the term of the lease, with the first payment due upon signing. Quattro's incremental borrowing rate is 8%, but its implicit interest rate is unknown.
Present value of an annuity at 8% for 5 years = 3.993
Present value of an annuity at 8% for 4 years = 3.312
On its December 31, 20X3 financial statements, Quatto would display the following amounts in the indicated accounts:
Equipment:
Accumulated Depreciation:
Lease payable:
Purchase this Solution
Solution Summary
The following posting helps with finance problems. Concepts covered include equipment amount, accumulated depreciation and lease payable.
Solution Preview
Since the life of the lease is 4/5=80% of the useful life, it is a capital lease.
The value of the equipment would be the present value of the lease payments. The lease payments are an ...
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.