Business, 05.05.2020 03:58, bellabae8390

Pharoah Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $29,625 at the beginning of each year. The first payment is received on January 1, 2020. Pharoah had purchased the machine during 2016 for $128,000. Collectibility of lease payments by Pharoah is probable. Pharoah set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Pharoah at the termination of the lease.

Required:
a. Compute the amount of the lease receivable.
b. Prepare all necessary journal entries for Pharoah for 2020.
c. Suppose the collectibility of the lease payments was not probable for Pharoah. Prepare the necessary journal entry for the company in 2020.
d. Suppose at the end of the lease term, Pharoah receives the asset and determines that it actually has a fair value of $1,480 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Pharoah at the end of the lease term.

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 18:00, wirchakethan23

Match the different financial task to their corresponding financial life cycle phases

Answers: 3

continue

Business, 22.06.2019 20:20, korireidkdotdot82021

Which of the following entries would be made to record the requisition of $12,000 of direct materials and $6,900 of indirect materials? (assume that indirect materials are included in raw materials inventory.) a. manufacturing overhead 18,900 raw materials inventory 18,900 b. wip inventory 12,000 manufacturing overhead 6,900 raw materials inventory 18,900 c. raw materials inventory 18,900 wip inventory 18,900 d. wip inventory 18,900 raw materials inventory 18,900

Answers: 1

continue

Business, 22.06.2019 21:40, summerhumphries3

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.

Answers: 3

continue

Business, 23.06.2019 00:50, aaronlikly

On december 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: accounts receivable, debit balance of $97,900; allowance for doubtful accounts, credit balance of $1,031. what amount should be debited to bad debts expense, assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

Answers: 1

continue

Do you know the correct answer?

Pharoah Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The...