Can someone please tell me if my adjusting entries are correct for this specific adjustment? If not can you please provide the correct answer? I think I am missing another adjustment for the rent expense incorrectly posted. Prepare adjusting entries for capital lease obligations. Scenario: Leases: Six ovens were rented on December 31, with $20,000 charged to rent expense. The lease runs for 6 years with an implicit interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusting entries. Guidelines from Professor: To record leased assets and liability: You must correct the rent expense incorrectly posted and then record the lease with the present value of the future obligation. The Rate is 5.3295. Income Taxes Currently PayableAccrued Pension LiabilityAccrued Employees Health InsuranceLease Liability1,042,118.1652,325.25375.00107,041.7043,718.91106,590.00990,167.91107,041.7043,718.91106,590.00Deferred Tax LiabilityBonds Payable52,325.2552,325.254,000,000.004,000,000.00Preferred Stock500,000.001,750,000.002,213,122.59500,000.00Common Stock1,750,000.002,213,122.59Beginning Retained earningsDividends - Preferred50,000.0050,000.00Dividends - Common5,250,000.005,250,000.00Bakery Sales33,881,157.15124,795.8033,881,157.15124,795.80Merchandise SalesCost of Goods Sold - Bakec10,954,907.3688,994.791,576,731.9510,954,907.3688,994.791,683,321.95Cost of Goods Sold - MerchRent Expense106,590.00Wages ExpenseMisc. Supplies ExpenseRepairs and MaintenanceBusiness License Expense2,604,526.23263,224.562,604,526.23263,224.56Misc. ExpenseDepreciation ExpenseInsurance ExpenseAdvertising ExpenseInterest ExpenseTelephone ExpensePension Expense47,353.05211,757.65141,171.08634,520.00112,937.69160,413.49484,703.2750,821.3447,353.05211,757.65141,171.08634,520.00112,937.69160,413.49484,703.2750,821.34107,041.7043,718.91107,041.7043,718.91Retired Employees Health Ins.

The present value of the annuity factor for 5 years is 4.3295, not 5.0756 as mentioned by your…

Answered: Can someone please tell me if my…

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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Can someone please tell me if my adjusting entries are correct for this specific adjustment? If not can you please provide the correct answer? I think I am missing another adjustment for the rent expense incorrectly posted.

Prepare adjusting entries for capital lease obligations.

Scenario:

Leases: Six ovens were rented on December 31, with $20,000 charged to rent expense. The lease runs for 6 years with an implicit interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjusting entries.

Guidelines from Professor:

To record leased assets and liability: You must correct the rent expense incorrectly posted and then record the lease with the present value of the future obligation. The Rate is 5.3295.

Income Taxes Currently Payable
Accrued Pension Liability
Accrued Employees Health Insurance
Lease Liability
1,042,118.16
52,325.25
375.00
107,041.70
43,718.91
106,590.00
990,167.91
107,041.70
43,718.91
106,590.00
Deferred Tax Liability
Bonds Payable
52,325.25
52,325.25
4,000,000.00
4,000,000.00
Preferred Stock
500,000.00
1,750,000.00
2,213,122.59
500,000.00
Common Stock
1,750,000.00
2,213,122.59
Beginning Retained earnings
Dividends - Preferred
50,000.00
50,000.00
Dividends - Common
5,250,000.00
5,250,000.00
Bakery Sales
33,881,157.15
124,795.80
33,881,157.15
124,795.80
Merchandise Sales
Cost of Goods Sold - Bakec
10,954,907.36
88,994.79
1,576,731.95
10,954,907.36
88,994.79
1,683,321.95
Cost of Goods Sold - Merch
Rent Expense
106,590.00
Wages Expense
Misc. Supplies Expense
Repairs and Maintenance
Business License Expense
2,604,526.23
263,224.56
2,604,526.23
263,224.56
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
Pension Expense
47,353.05
211,757.65
141,171.08
634,520.00
112,937.69
160,413.49
484,703.27
50,821.34
47,353.05
211,757.65
141,171.08
634,520.00
112,937.69
160,413.49
484,703.27
50,821.34
107,041.70
43,718.91
107,041.70
43,718.91
Retired Employees Health Ins.

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