Answered

IDNLearn.com: Your trusted platform for finding reliable answers. Get accurate answers to your questions from our community of experts who are always ready to provide timely and relevant solutions.

Derozan Corp. manufactured equipment at a cost of $366,953 and leased it to B Corp. on January 1, 2019 for an eight-year period expiring December 31, 2026. Eight years is considered a major part of the asset’s economic life. Equal payments under the lease are $59,980 and are due on January 1 and July 1 of each year. The first payment was made on January 1, 2019. The implicit rate used by Derozan is 8%. Additional information: Present value of an annuity due of $1 for 8 periods at 8% 6.21 Present value of an annuity due of $1 for 16 periods at 4% 12.12 What is the Debit to Lease receivable recorded by Derozan on January 1, 2019?

Sagot :

Parrainidn

Answer: $‭726,957.6‬0

Explanation:

The debit to Lease Receivable is the present value of the payments to be made by B Corp. for the 8 years.

Payments are made twice a year so period is 16 periods.

Rate = 8% /2

= 4%

Present value = Payments * Present value of an annuity due factor, 16 periods, 4%

= 59,980 * 12.12

= $‭726,957.6‬0

We appreciate your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. Accurate answers are just a click away at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.