On January 1, 2014, Railcar Leasing Inc. (the lessor) purchased 10 used boxcars from Railroad Equipment Consolidators at a price of $8,345,640. Railcar leased the boxcars to the Reading Railroad Company (the lessee) on the same date. The lease calls for eight annual payments of $1,500,000 to be made at the beginning of each year (that is, the first payment is due at the inception of the lease on January 1, 2014). The boxcars have an eight-year remaining useful life, the lease contains no renewal or bargain purchase option, and possession of the boxcars reverts to the lessor at the lease’s end. The lease does not require the lessee to guarantee any residual value for the boxcars. The payment’s collectibility is reasonably certain with no important uncertainties regarding un-reimbursable costs to be incurred by the lessor. The lessor has structured the lease to earn a rate of return of 12.0%.
1. What method must Railcar Leasing Inc. use to account for the lease?
2. Prepare an amortization schedule for the lease for Railcar. (Round all amounts to the nearest cent.)
3. Prepare all journal entries for Railcar for 2014 and 2015. Assume that it reports on a calendar-year basis.
Ratio is an index that measures one variable relative to another and is generally expressed as a percentage or a rate. The ratio that tests how leveraged an organisation ...Apr 05 2018
Write the letter of the correctly punctuated sentence in the space provided. Use a dictionary or reference manual as needed.a. "Go as far as you can see; when you get the...Jul 14 2021
ASSESS THE EFFECTS OF THE TERRORIST ATTACKS OF SEPTEMBER 11, 2001 AND THE WAR ON TERRORISM ON THE DEMAND FOR THE FOLLOWINGITEMS IN THE UNITED STATES: AIRLINE TICKETS, ...Apr 12 2020
Oxytocin is a hormone that is released in response to cervical dilation. It in turn causes more uterine contractions that will further dilate the cervix. What type of fee...Dec 16 2019
Make-or-Buy, Traditional AnalysisWehner Company is currently manufacturing Part ABS-43, producing 58,000 units annually. The part is used in the production of several pro...Jul 26 2021
Suppose the wage rates of workers are based on the expected price level. If there is an unexpected increase in AD, it will cause the actual price level to increase. Then ...Aug 18 2021
The bank portion of the bank reconciliation for Sheridan Company at October 31, 2017, is shown below.SHERIDAN COMPANY Bank Reconciliation October 31, 2017 Cash balance pe...Jul 26 2021
Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of riceâFragrant, White, and Loonzain. Budgeted sales by product ...Aug 11 2021
On November 1, 2017, the account balances of Schilling Equipment Repair were as follows.May 14 2020
Calculate the molar mass of the following substances.a. P4O6b. Ca3(PO42c. Na2HPO4Jul 28 2021