accounting 3 494967

11 10 9 8 7 6 5 4 1,2,3 Cover Show your work: Determination (show your work) Explanation: 1 – Lease signing date 2 – Record the first payment 1. A lease involves payments of $1,000 per month for two years. The payments are made at the end of each month. The lease also involves a guaranteed residual value of $10,000 to be paid at the end of the 2-year period. The appropriate interest rate is 12% compounded monthly. Compute the present value of the minimum lease payments. 2. The lessor leased equipment to the lessee. The fair value of the equipment is $246,000. Lease payments are $35,000 per year, payable at the end of the year, for 10 years. The interest rate implicit in the lease is 9%. At the end of 10 years, the lessor will repossess the equipment. The lease does not include a bargain purchase option, and the equipment has a total estimated useful life of 15 years. Is the lease an operating lease or a capital lease? Explain. 3. On January 1, the lessee company signed an operating lease contract. The lease contract calls for $3,000 payments at the end of each year for 10 years. The rate implicit in the lease is 10%. Make the journal entries or memorandum necessary on the books of the lessee company (1) on the lease-signing date and (2) to record the first payment. Date Account Description Debit Credit Dr. Cr. To record lease To record first lease payment To record amortization of the leased asset. To accrue interest payable on capital lease at end of year To record the prepaid executory costs The temporary differences are expected to reverse in the following patterns: Year Gross Profit on Collections Bad Debt Write-Offs Total The enacted tax rates for this year and the next four years are as follows Assume that there will be sufficient income in each future year to realize any deductible amounts. For classification purposes, the bad debt write-offs are considered to be associated with a current asset, and the…