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Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022. Other information: Lease term                       3 years Annual payments             $40,000 on January 1 each year Life of asset                      3 years Implicit interest rate          8% There is no expected residual value. Required: 1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as the present value of future lease payments. Explain how you compute this PV. 2. Prepare appropriate journal entries for Broncos for 2022. Assume straight-line amortization and a December 31 year-end. Round your answers to the nearest whole dollar amounts. January 1, 2022: December 31, 2022:

Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022. Other information: Lease term                       3 years Annual payments             $40,000 on January 1 each year Life of asset                      3 years Implicit interest rate          8% There is no expected residual value. Required: 1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as the present value of future lease payments. Explain how you compute this PV. 2. Prepare appropriate journal entries for Broncos for 2022. Assume straight-line amortization and a December 31 year-end. Round your answers to the nearest whole dollar amounts. January 1, 2022: December 31, 2022:

FINANCIAL ACCOUNTING
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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Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022.
Other information:
Lease term                       3 years
Annual payments             $40,000 on January 1 each year
Life of asset                      3 years
Implicit interest rate          8%
There is no expected residual value.
Required:
1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as the
present value of future lease payments. Explain how you compute this PV.


2. Prepare appropriate journal entries for Broncos for 2022. Assume straight-line amortization
and a December 31 year-end. Round your answers to the nearest whole dollar amounts.
January 1, 2022:


December 31, 2022:

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