AC 302 WEEK 6 Exercise 21 Question 8

AC 302 WEEK 6 Exercise 21 Question 8
The following facts pertain to a noncancelable lease agreement between Mooney Leasing Company and Rode Company, a lessee.
Inception date:		May 1, 2014	
Annual lease payment due at the beginning of			
   each year, beginning with May 1, 2014		$18,945.06	
Bargain-purchase option price at end of lease term		$3,840.00	
Lease term		5 	years
Economic life of leased equipment		10	years
Lessor- cost		$65,000.00	
Fair value of asset at May 1, 2014		$80,000.00	
Lessor- implicit rate		11	%
Lessee- incremental borrowing rate		11	%

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs.


	 
 
 	 
 	Your answer is correct. 
 	 
Prepare a lease amortization schedule for Rode Company for the 5-year lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25125 and Round answers to 2 decimal places, e.g. 15.25.)
RODE COMPANY (Lessee)
Lease Amortization Schedule
Date		Annual Lease Payment Plus
BPO		Interest on
Liability		Reduction of Lease
Liability		Lease Liability
5/1/14								$  

5/1/14		$  
	$  
	$  
	  

5/1/15		  
	  
	  
	  

5/1/16		  
	  
	  
	  

5/1/17		  
	  
	  
	  

5/1/18		  
	  
	  
	  

4/30/19