Homework Help is Here – Start Your Trial Now!
Business
Accounting
ate Type of Asset Lease is non-cancellable and meets the test for a finance lease Lease period and economic life in years The implicit interest rate of the lessor is Residual value of the asset Residual value is guaranteed and expected to be equal to the estimated residual value Lease starts First lease payment Fair value of the asset (present value) Present value of the residual value (20,000 X .46651) PV$ 8 periods 10% Amount to be recovered via lease payments Amount of annual lease payments Required: Complete the Lessees amortization schedule. Prepare the lessees journal entries for 2020 and 2021 Lessees Journal Entries Account Beginning Remember the first payment is a down payment with no interest calculated $ $ $ 8 10.0% 20,000 Dr. 1/1/20 1/1/20 700,002 (9,330) Lessee Lease Amortization Schedule Annuity Due basis 10% 690,672 117,693.01 Annual Payment N/A Interest 10% Implicit Rate N/A Cr. PV - Annuity due 8 periods 10% 5.86842 10.00% Reduction of Lease Liability N/A Lease Liability

ate Type of Asset Lease is non-cancellable and meets the test for a finance lease Lease period and economic life in years The implicit interest rate of the lessor is Residual value of the asset Residual value is guaranteed and expected to be equal to the estimated residual value Lease starts First lease payment Fair value of the asset (present value) Present value of the residual value (20,000 X .46651) PV$ 8 periods 10% Amount to be recovered via lease payments Amount of annual lease payments Required: Complete the Lessees amortization schedule. Prepare the lessees journal entries for 2020 and 2021 Lessees Journal Entries Account Beginning Remember the first payment is a down payment with no interest calculated $ $ $ 8 10.0% 20,000 Dr. 1/1/20 1/1/20 700,002 (9,330) Lessee Lease Amortization Schedule Annuity Due basis 10% 690,672 117,693.01 Annual Payment N/A Interest 10% Implicit Rate N/A Cr. PV - Annuity due 8 periods 10% 5.86842 10.00% Reduction of Lease Liability N/A Lease Liability

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Qw .7.

ate Type of Asset Lease is non- cancellable and meets the test for a finance lease Lease period and economic life in years The implicit interest rate of the lessor is Residual value of the asset Residual value is guaranteed and expected to be equal to the estimated residual value Lease starts First lease payment Fair value of the asset (present value) $ Present value of the residual value (20,000 X 46651) PV$ 8 periods 10% $ Amount to be recovered via lease payments $ Amount of annual lease payments Required: Complete the Lessees amortization schedule Prepare the lessees journal entries for 2020 and 2021 Lessees Journal Entries Account $ Beginning Remember the first payment is a down payment with no interest calculated $ 8 10.0% 20,000 Dr. 1/1/20 1/1/20 700,002 (9,330) Lessee Lease Amortization Schedule Annuity Due basis 10% 690,672 117,693.01 Annual Payment N/A Interest 10% Implicit Rate N/A Cr. PV - Annuity due 8 periods 10% 5.86842 10.00% Reduction of Lease Liability N/A Lease Liability
Transcribed Image Text:ate Type of Asset Lease is non- cancellable and meets the test for a finance lease Lease period and economic life in years The implicit interest rate of the lessor is Residual value of the asset Residual value is guaranteed and expected to be equal to the estimated residual value Lease starts First lease payment Fair value of the asset (present value) $ Present value of the residual value (20,000 X 46651) PV$ 8 periods 10% $ Amount to be recovered via lease payments $ Amount of annual lease payments Required: Complete the Lessees amortization schedule Prepare the lessees journal entries for 2020 and 2021 Lessees Journal Entries Account $ Beginning Remember the first payment is a down payment with no interest calculated $ 8 10.0% 20,000 Dr. 1/1/20 1/1/20 700,002 (9,330) Lessee Lease Amortization Schedule Annuity Due basis 10% 690,672 117,693.01 Annual Payment N/A Interest 10% Implicit Rate N/A Cr. PV - Annuity due 8 periods 10% 5.86842 10.00% Reduction of Lease Liability N/A Lease Liability
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Lease accounting
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
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS