Hoof & Tail Ltd Enters into a Non-Cancellable Lease AgreementThe Interest Rate Implicit in the Lease Is 11% and with Equine

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Hoof & Tail Ltd Enters into a Non-Cancellable Lease AgreementThe Interest Rate Implicit in the Lease Is 11% and with Equine

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Hoof & Tail Ltd Enters into a Non-Cancellable Lease Agreement

Question 33

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Hoof & Tail Ltd enters into a non-cancellable lease agreement with Equine Industries to lease some equipment under the following conditions: $\begin{array} { | l | r | l | } \hline \text { Duration of the lease } & 9 \text { years } & \\\hline \text { Life of leased asset } & 11 \text { years } & \\\hline \text { Unguaranteed residual } & \$ 6,000 & \\\hline \text { Lease payment } & \$ 7,000 & \text { at lease inception } \\\hline \text { Lease payments (in arrears) } & \$ 5,000 & \text { per year (9 payments) } \\\hline\end{array}$ The interest rate implicit in the lease is 11% and the fair value of the asset at the inception of the lease is $37 031.What are the journal entries to record the lease,the payment at lease inception and the first lease payment in the books of the lessee (rounded to the nearest dollar) ?

A)
$Hoof & Tail Ltd enters into a non-cancellable lease agreement with Equine Industries to lease some equipment under the following conditions: \begin{array} { | l | r | l | } \hline \text { Duration of the lease } & 9 \text { years } & \\ \hline \text { Life of leased asset } & 11 \text { years } & \\ \hline \text { Unguaranteed residual } & \$ 6,000 & \\ \hline \text { Lease payment } & \$ 7,000 & \text { at lease inception } \\ \hline \text { Lease payments (in arrears) } & \$ 5,000 & \text { per year (9 payments) } \\ \hline \end{array} The interest rate implicit in the lease is 11% and the fair value of the asset at the inception of the lease is $37 031.What are the journal entries to record the lease,the payment at lease inception and the first lease payment in the books of the lessee (rounded to the nearest dollar) ? A) B) C) D)$
B)
$Hoof & Tail Ltd enters into a non-cancellable lease agreement with Equine Industries to lease some equipment under the following conditions: \begin{array} { | l | r | l | } \hline \text { Duration of the lease } & 9 \text { years } & \\ \hline \text { Life of leased asset } & 11 \text { years } & \\ \hline \text { Unguaranteed residual } & \$ 6,000 & \\ \hline \text { Lease payment } & \$ 7,000 & \text { at lease inception } \\ \hline \text { Lease payments (in arrears) } & \$ 5,000 & \text { per year (9 payments) } \\ \hline \end{array} The interest rate implicit in the lease is 11% and the fair value of the asset at the inception of the lease is $37 031.What are the journal entries to record the lease,the payment at lease inception and the first lease payment in the books of the lessee (rounded to the nearest dollar) ? A) B) C) D)$
C)
$Hoof & Tail Ltd enters into a non-cancellable lease agreement with Equine Industries to lease some equipment under the following conditions: \begin{array} { | l | r | l | } \hline \text { Duration of the lease } & 9 \text { years } & \\ \hline \text { Life of leased asset } & 11 \text { years } & \\ \hline \text { Unguaranteed residual } & \$ 6,000 & \\ \hline \text { Lease payment } & \$ 7,000 & \text { at lease inception } \\ \hline \text { Lease payments (in arrears) } & \$ 5,000 & \text { per year (9 payments) } \\ \hline \end{array} The interest rate implicit in the lease is 11% and the fair value of the asset at the inception of the lease is $37 031.What are the journal entries to record the lease,the payment at lease inception and the first lease payment in the books of the lessee (rounded to the nearest dollar) ? A) B) C) D)$
D)
$Hoof & Tail Ltd enters into a non-cancellable lease agreement with Equine Industries to lease some equipment under the following conditions: \begin{array} { | l | r | l | } \hline \text { Duration of the lease } & 9 \text { years } & \\ \hline \text { Life of leased asset } & 11 \text { years } & \\ \hline \text { Unguaranteed residual } & \$ 6,000 & \\ \hline \text { Lease payment } & \$ 7,000 & \text { at lease inception } \\ \hline \text { Lease payments (in arrears) } & \$ 5,000 & \text { per year (9 payments) } \\ \hline \end{array} The interest rate implicit in the lease is 11% and the fair value of the asset at the inception of the lease is $37 031.What are the journal entries to record the lease,the payment at lease inception and the first lease payment in the books of the lessee (rounded to the nearest dollar) ? A) B) C) D)$

Hoof & Tail Ltd Enters into a Non-Cancellable Lease Agreement

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