35 part cThe following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pina Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $104,218 Residual value of equipment at end of lease term, guaranteed by the lessee $51,000 Expected residual value of equipment at end of lease term $46,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, $540,000 Lessor’s implicit rate 9 % Lessee’s incremental borrowing rate 9 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. (c) Suppose Pina received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? Right-of-use asset $enter a dollar amount Lease Liability $enter a dollar amount What if Pina prepaid rent of $5,000 to Faldo? Right-of-use asset $enter a dollar amount Lease Liability $enter a dollar amount

35 part c The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pina Company, a lessee. Commencement date January 1, Annual lease payment due at the...

35 part c

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pina Company, a lessee.

Commencement date	January 1,
Annual lease payment due at the beginning of each year, beginning with January 1,	$104,218
Residual value of equipment at end of lease term, guaranteed by the lessee	$51,000
Expected residual value of equipment at end of lease term	$46,000
Lease term	6	years
Economic life of leased equipment	6	years
Fair value of asset at January 1,	$540,000
Lessor’s implicit rate	9	%
Lessee’s incremental borrowing rate	9	%

The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.

(c)

Suppose Pina received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected?

Right-of-use asset		$enter a dollar amount
Lease Liability		$enter a dollar amount

What if Pina prepaid rent of $5,000 to Faldo?

Right-of-use asset		$enter a dollar amount
Lease Liability		$enter a dollar amount

Jun 01, 2022

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35 part c The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pina Company, a lessee. Commencement date January 1, Annual lease payment due at the...

(c)

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