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Dennis_Churaev [7]
3 years ago
6

Crane Co. leased equipment to Riggs Company on May 1, 2021. At that time the collectibility of the lease payments was not probab

le. The lease expires on May 1, 2022. Riggs could have bought the equipment from Crane for $6150000 instead of leasing it. Crane’s accounting records showed a book value for the equipment on May 1, 2021, of $5450000. Crane’s depreciation on the equipment in 2021 was $740000. During 2021, Riggs paid $1524000 in rentals to Crane for the 8-month period. Crane incurred maintenance and other related costs under the terms of the lease of $123000 in 2021. After the lease with Riggs expires, Crane will lease the equipment to another company for two years. Ignoring income taxes, the amount of expense incurred by Riggs from this lease for the year ended December 31, 2021, should be
Business
1 answer:
9966 [12]3 years ago
3 0

Answer:

$ 661,000

Explanation:

Solution

Given that:

Since the lease meets none of the capital lease categorization criteria ,The lease is an called a lease that is operating and  the asset  will stay in books of lessor

Lease revenue                               $1524000

less:

Maintenance               $123000

Depreciation              $740000     $863000

Income before taxes                      $661000

Therefore, The amount of expense incurred by Riggs from this lease for the year ended December 31, 2021 is $ 661,000

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True

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zero-coupon bond is a security that pays no interest, and is therefore bought at a substantial discount from its face value. If
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Answer:

$1,203.83

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