Scribd Logo
Upload

Welcome to Scribd!

  • Exercise 2

    Uploaded by

    Drey Jan
    12 views6 pages
    This document contains multiple problems related to accounting for operating leases as a lessor. It provides journal entries for the lessor to record various lease transactions such as receiving rental payments, repairs expenses, depreciation of the leased asset, and amortization of initial direct costs. It also includes calculations of the gross and net investments in a finance lease, present value of lease payments, and journal entries to record a finance lease over its term from inception to maturity. The problems cover the full accounting process for an operating and finance lease from the perspective of the lessor.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document contains multiple problems related to accounting for operating leases as a lessor. It provides journal entries for the lessor to record various lease transactions such as receiving rental payments, repairs expenses, depreciation of the leased asset, and amortization of initial direct costs. It also includes calculations of the gross and net investments in a finance lease, present value of lease payments, and journal entries to record a finance lease over its term from inception to maturity. The problems cover the full accounting process for an operating and finance lease from the perspective of the lessor.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views6 pages

    Exercise 2

    Uploaded by

    Drey Jan
    This document contains multiple problems related to accounting for operating leases as a lessor. It provides journal entries for the lessor to record various lease transactions such as receiving rental payments, repairs expenses, depreciation of the leased asset, and amortization of initial direct costs. It also includes calculations of the gross and net investments in a finance lease, present value of lease payments, and journal entries to record a finance lease over its term from inception to maturity. The problems cover the full accounting process for an operating and finance lease from the perspective of the lessor.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 6

    CHAPTER 12

    Operating Lease - Lessor


    PROBLEM 12-1

    Requirement 1
    Books of Lessor
    1 Equipment ₱ 3,000,000.00
    Cash ₱ 3,000,000.00

    2 Cash (40,000*9) ₱ 360,000.00


    Rent Income ₱ 360,000.00

    3 Cash ₱ 120,000.00
    Unearned Rent Income ₱ 120,000.00

    4 Repairs ₱ 20,000.00
    Cash ₱ 20,000.00

    5 Unearned Rent Income ₱ 30,000.00


    Rent Income (120,000/3*9/12) ₱ 30,000.00

    6 Depreciation ₱ 300,000.00
    Accummulated Depreciation (3,000,000/10) ₱ 300,000.00

    Requirement 2
    Rent Income ₱ 390,000.00
    Less: Repairs ₱ 20,000.00
    Depreciation ₱ 300,000.00 ₱ 320,000.00
    Net Income of Lessor ₱ 70,000.00
    CHAPTER 12
    Operating Lease - Lessor
    PROBLEM 12-3

    Requirement 1
    Books of Lessor
    1 Machinery ₱ 2,400,000.00
    Cash ₱ 2,400,000.00

    2 Cash (36,000*9) ₱ 324,000.00


    Rent Income ₱ 324,000.00

    3 Deferred Initial Direct Costs ₱ 120,000.00


    Cash ₱ 120,000.00

    4 Amortization of Initial Direct Costs ₱ 22,500.00


    Deferred Initial Direct Costs (120,000/4*9/12) ₱ 22,500.00

    5 Depreciation ₱ 180,000.00
    Accumulated Depreciation (2,400,000/10*9/12) ₱ 180,000.00

    Requirement 2
    Machinery ₱ 2,400,000.00
    Accumulated Depreciation -₱ 180,000.00
    Carrying Amount ₱ 2,220,000.00
    Deferred Initial Direct Costs ₱ 97,500.00
    Adjusted Carrying Amount ₱ 2,317,500.00
    CHAPTER 12
    Operating Lease - Lessor
    PROBLEM 12-6

    2020
    1 Equipment ₱ 375,000.00
    Cash ₱ 375,000.00

    2 Equipment ₱ 75,000.00
    Cash ₱ 75,000.00

    2021
    1 Cash ₱ 180,000.00
    Rent Income ₱ 180,000.00

    2 Repairs ₱ 7,000.00
    Transportation ₱ 3,000.00
    Cash ₱ 10,000.00

    3 Depreciation ₱ 90,000.00
    Acccumulated Depreciation (450,000/5) ₱ 90,000.00

    4 Rent Income ₱ 45,000.00


    Unearned Rent Income (15,000*3) ₱ 45,000.00
    CHAPTER 12
    Operating Lease - Lessor
    PROBLEM 12-7

    2020 Rent Receivable ₱ 765,000.00


    Rent Income ₱ 765,000.00

    Total Rent (100000*51) ₱ 5,100,000.00


    Average Annual Rent (5,100,000/5) ₱ 1,020,000.00
    Rent from April 1 to December 31,2020 (1,020,000*9/12) ₱ 765,000.00

    2021 Cash (100,000*12) ₱ 1,200,000.00


    Rent Income ₱ 1,020,000.00
    Rent Receivable ₱ 180,000.00

    2022 Cash ₱ 1,200,000.00


    Rent Income ₱ 1,020,000.00
    Rent Receivable ₱ 180,000.00

    2023 Cash ₱ 1,200,000.00


    Rent Income ₱ 1,020,000.00
    Rent Receivable ₱ 180,000.00

    2024 Cash ₱ 1,200,000.00


    Rent Income ₱ 1,020,000.00
    Rent Receivable ₱ 180,000.00

    2025 Cash (100000*3) ₱ 300,000.00


    Rent Income (1,020,000*3/12) ₱ 255,000.00
    Rent Receivable ₱ 45,000.00
    CHAPTER 12
    Operating Lease - Lessor
    PROBLEM 13-2

    Requirement 1
    Gross Rentals (900,000*8) ₱ 7,200,000.00
    Residual Value ₱ 600,000.00
    Gross Investment - Debit to lease receivable ₱ 7,800,000.00
    Net Investment - Cost Equipment ₱ 5,250,000.00
    Total Financial Revenue ₱ 2,550,000.00

    Requirement 2
    Date Payment Interest Principal Present Value
    01/01/2020 ₱ 5,250,000.00
    01/01/2020 ₱ 900,000.00 - ₱ 900,000.00 ₱ 4,350,000.00
    01/01/2021 ₱ 900,000.00 ₱ 522,000.00 ₱ 378,000.00 ₱ 3,972,000.00
    01/01/2022 ₱ 900,000.00 ₱ 476,640.00 ₱ 423,360.00 ₱ 3,548,640.00
    01/01/2023 ₱ 900,000.00 ₱ 425,837 ₱ 474,163 ₱ 3,074,477
    01/01/2024 ₱ 900,000.00 ₱ 368,937 ₱ 531,063 ₱ 2,543,414
    01/01/2025 ₱ 900,000.00 ₱ 305,210 ₱ 594,790 ₱ 1,948,624
    01/01/2026 ₱ 900,000.00 ₱ 233,835 ₱ 666,165 ₱ 1,282,459
    01/01/2027 ₱ 900,000.00 ₱ 153,895 ₱ 746,105 ₱ 536,354
    01/01/2028 ₱ 600,000.00 ₱ 63,646 ₱ 536,354 -
    ₱ 7,800,000.00 ₱ 2,550,000

    Requirement 3
    2020
    Jan-01 Lease Receivable ₱ 7,800,000.00
    Equipment ₱ 5,250,000.00
    Unearned Interest Income ₱ 2,550,000.00

    Jan-01 Cash ₱ 900,000.00


    Lease Receivable ₱ 900,000.00

    Dec-31 Unearned Interest Income ₱ 522,000.00


    Interest Income ₱ 522,000.00

    2021
    Jan-01 Cash ₱ 900,000.00
    Lease Receivable ₱ 900,000.00

    Dec-31 Unearned Interest Income ₱ 476,640.00


    Interest Income ₱ 476,640.00

    Requirement 4
    2027
    Jan-01 Cash ₱ 900,000.00
    Lease Receivable ₱ 900,000.00

    Dec-31 Unearned Interest Income ₱ 63,646.00


    Interest Income ₱ 63,646.00

    Requirement 5
    2028
    Jan-01 Equipment ₱ 500,000.00
    Loss of Finance Lease ₱ 100,000.00
    Lease Receivable ₱ 600,000.00
    CHAPTER 12
    Operating Lease - Lessor
    PROBLEM 13-5

    Question 1,2,3
    Gross Rentals 900000*8 ₱ 7,200,000.00 #1
    Residual Value ₱ 600,000.00
    Gross Investment - Debit to lease receivable ₱ 7,800,000.00
    Net Investment - Cost Equipment 5000000+250000 ₱ 5,250,000.00 #2
    Total Financial Revenue ₱ 2,550,000.00 #3

    Question 4
    Date Payment Interest Principal Present Value
    01/01/2020 ₱ 5,250,000.00
    01/01/2020 900,000 - ₱ 900,000.00 ₱ 4,350,000.00
    01/01/2021 900,000 ₱ 522,000.00 ₱ 378,000.00 ₱ 3,972,000.00
    #4

    You might also like