Asian Transit Marine Corporation (Lessee) leases a forklift from NDP Leasing Corp. (Lessor). The lease, signed on January 1, 2019, specifies that NDP grants right-of-use of the forklift to Asian Transit. The lease terms are as follows: Lease is non-cancelable, term of four years, equal rental payments of P11,182.24 at the beginning of each year (annuity-due). Forklift has a fair value of P40,000, economic life of four years, and no residual value. Cost of forklift on NDP’s books is P30,000. No renewal options. forklift reverts to NDP. Implicit rate of lessor is 8 percent and is known by Asian Transit. Required: Prepare Journal Entries for both the Lessor and the Lessee from lease commencement until last lease payment. Show solutions of arrived amounts in good form.
Asian Transit Marine Corporation (Lessee) leases a forklift from NDP Leasing Corp. (Lessor). The lease, signed on January 1, 2019, specifies that NDP grants right-of-use of the forklift to Asian Transit. The lease terms are as follows: Lease is non-cancelable, term of four years, equal rental payments of P11,182.24 at the beginning of each year (annuity-due). Forklift has a fair value of P40,000, economic life of four years, and no residual value. Cost of forklift on NDP’s books is P30,000. No renewal options. forklift reverts to NDP. Implicit rate of lessor is 8 percent and is known by Asian Transit. Required: Prepare Journal Entries for both the Lessor and the Lessee from lease commencement until last lease payment. Show solutions of arrived amounts in good form.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Asian Transit Marine Corporation (Lessee) leases a forklift from NDP Leasing Corp. (Lessor). The lease, signed on January 1, 2019, specifies that NDP grants right-of-use of the forklift to Asian Transit. The lease terms are as follows:
- Lease is non-cancelable, term of four years, equal rental payments of P11,182.24 at the beginning of each year (annuity-due).
- Forklift has a fair value of P40,000, economic life of four years, and no residual value.
- Cost of forklift on NDP’s books is P30,000.
- No renewal options. forklift reverts to NDP. Implicit rate of lessor is 8 percent and is known by Asian Transit.
Required: Prepare
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education