American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completedconstruction of the machine on January 1, 2021. The lease agreement for the $4.1 million (fair value and present value of the leasepayments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be fiveyears with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 andPVAD of $1) (Use appropriate factor(s) from the tables provided.)Required:1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021.2. Prepare an amortization schedule for the four-year term of the lease.3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023.Complete this question by entering your answers in the tabs below.Req 11Req 2Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. (If no entry is required for a transaction/event,select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions. Round yourintermediate and final answers to the nearest whole dollar.)View transaction list2Req 3 and 4Record the lease payment and interest expense forAmerican Food Services.Record the amortization of right-of-use asset forAmerican Food Services.3 Record the lease payment and interest expense forAmerican Food Services.4 Record the amortization of right-of-use asset forAmerican Food Services.Xrvices.Credit> American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completedconstruction of the machine on January 1, 2021. The lease agreement for the $4.1 million (fair value and present value of the leasepayments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be fiveyears with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 andPVAD of $1) (Use appropriate factor(s) from the tables provided.)Required:1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021.2. Prepare an amortization schedule for the four-year term of the lease.3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023.Complete this question by entering your answers in the tabs below.Req 1YearReq 2Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollars and not in millions.Round your answers to the nearest whole dollar. Enter all amounts as positive values.)2021202220232024TotalReq 3 and 4LeasePaymentsLease Amortization ScheduleDecrease inBalanceEffectiveInterest0< Req 1OutstandingBalanceReq 3 and 4 >

Solution 1: Journal Entries - American food service Date Particulars Debit Credit 01-Jan-21…

American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.1 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1, PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023.

American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.1 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1, PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...

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Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?
American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.1 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. & 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Prepare the appropriate entries related to the lease…
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