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Entries for Lease—Lessee On January 2, 2008, Jacques Company entered into a no cancelable lease for new equipment. The equipment was built to Jacques Company’s specifications and is in an area in which rental to another lessee would be difficult. Rental payments are...

Schedule of Lease Payments Wallin Construction Co. is leasing equipment from Astro Inc. The lease calls for payments of $75,000 a year plus $5,000 a year executory costs for five years. The first payment is due on January 1, 2008, when the lease is signed, with the...

Entry for Purchase by Lessee Cordon Enterprise Company leases many of its assets and capitalizes most of the leased assets. At December 31, the company had the following balances on its books in relation to a piece of specialized equipment: Leased...

Sales Type Lease—Lessor Salcedo Co. leased equipment to Erickson Inc. on April 1, 2008. The lease, appropriately recorded as a sale by Salcedo, is for an 8 year period ending March 31, 2013. The first of eight equal annual payments of $175,000 (excluding executory...

Effect of Lease on Reported Income—Lessee and Lessor On February 20, 2008,Topham Inc. purchased a machine for $1,200,000 for the purpose of leasing it. The machine is expected to have a 10 year life, no residual value, and is depreciated on the straight line basis to...

Cash Flow Treatment of Capital Leases—Lessor On January 1, 2008, Delhi Club Company purchased some equipment for $45,372 in cash. Delhi Club immediately leased the equipment; Delhi Club is the lessor. The lease contract calls for the receipt of $10,000 payments at the...

Lease Disclosures—Lessee The following lease information was obtained by a staff auditor for a client, Kroller Inc., at December 31, 2008. Indicate how this information should be presented in Kroller’s 2 year comparative financial statements. Include any notes to the...

Lease Disclosure on the Financial Statements Acme Enterprises leased equipment from Monument Equipment Co. on January 1, 2008. The terms of the lease agreement require five annual payments of $20,000 with the first payment being made on January 1, 2008, and each...

Sale Leaseback Accounting On July 1, 2008, Baker Corporation sold equipment it had recently purchased to an unaffiliated company for $570,000. The equipment had a book value on Baker’s books of $450,000 and a remaining life of five years. On that same day, Baker...