Accounting for Leases Using Finance and Operating Lease MethodsCore Co. leased a piece of manufacturing equipment from E-So Co. with the following terms:Annual lease payment: $770,000Term of lease: 5 yearsInterest rate: 4%Lease commences on January 1, 2023Payments are made on December 31 of each year in the lease termFor parts a and b:a. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as a finance lease.b. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as an operating lease.Operating LeaseFinance Leaseb. Operating lease:DateJan. 1, 2023AccountTo record the start of the operating lease.Dec. 31, 2023To record the lease payment.Dec. 31, 2023To record the lease expense.Dec. 31, 2024To record the lease payment.Dec. 31, 2024To record the lease expense.> > > > > > > > > > > >DebitCredit

Journal entries are used to record all the financial transactions. It helps to know the financial…

Accounting for Leases Using Finance and Operating Lease Methods Core Co. leased a piece of manufacturing equipment from E-So Co. with the following terms: Annual lease payment: $770,000 Term of lease: 5 years nterest rate: 4% Lease commences on January 1, 2023 Payments are made on December 31 of each year in the lease term For parts a and b: a. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as a finance lease. p. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as an operating lease. Operating Lease Finance Lease . Operating lease: Date Jan. 1, 2023 Account To record the start of the operating lease. Dec. 31, 2023 To record the lease payment. Dec. 31, 2023 Dec. 31, 2024 To record the lease expense. To record the lease payment. Dec. 31, 2024 To record the lease expense. > > > > > > > > > > Debit Credit

Accounting for Leases Using Finance and Operating Lease Methods Core Co. leased a piece of manufacturing equipment from E-So Co. with the following terms: Annual lease payment: $770,000 Term of lease: 5 years nterest rate: 4% Lease commences on January 1, 2023 Payments are made on December 31 of each year in the lease term For parts a and b: a. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as a finance lease. p. Prepare journal entries to show the effects for Core Co. for January 1, 2023-December 31, 2024, if the lease is classified as an operating lease. Operating Lease Finance Lease . Operating lease: Date Jan. 1, 2023 Account To record the start of the operating lease. Dec. 31, 2023 To record the lease payment. Dec. 31, 2023 Dec. 31, 2024 To record the lease expense. To record the lease payment. Dec. 31, 2024 To record the lease expense. > > > > > > > > > > Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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