-Your answer is partially correct. Prepare the journal entries for Sarasota for the year 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 5,275. List all debit entries before credit entries.) Date Account Titles and Explanation January 1, 2025 Right-of-Use Asset January 1, 2025 Lease Liability (To record lease) Lease Liability Debit 11931 December 31, 2025 December 31, 2025 Cash (To records first lease payment) Interest Expense Lease Liability (To record accrued interest) Amortization Expense Right-of-Use Asset (To record amortization expense) DU LU eTextbook and Media List of Accounts Current Attempt in Progress Ivanhoe Incorporated leases a piece of machinery to Sarasota Company on January 1, 2025, under the following terms 1. The lease is to be for 4 years with rental payments of $11,931 to be made at the beginning of each year. 2. The machinery has a fair value of $63,358, a book value of $47,280, and an economic life of 10 years. 3. 4 5. 6. At the end of the lease term, both parties expect the machinery to have a residual value of $23,640. To protect against a large loss, Ivanhoe requests Sarasota to guarantee $16,480 of the residual value, which Sarasota agrees to do. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. The implicit rate is 5%, which is known by Sarasota. Collectibility of the payments is probable. Click here to view factor tables. Your answer is correct Evaluate the criteria for classification of the lease, and describe the nature of the lease For the lessee, it is a Finance lease and for the lessor, it is a sales-type lease v eTextbook and Media List of Accounts
-Your answer is partially correct. Prepare the journal entries for Sarasota for the year 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 5,275. List all debit entries before credit entries.) Date Account Titles and Explanation January 1, 2025 Right-of-Use Asset January 1, 2025 Lease Liability (To record lease) Lease Liability Debit 11931 December 31, 2025 December 31, 2025 Cash (To records first lease payment) Interest Expense Lease Liability (To record accrued interest) Amortization Expense Right-of-Use Asset (To record amortization expense) DU LU eTextbook and Media List of Accounts Current Attempt in Progress Ivanhoe Incorporated leases a piece of machinery to Sarasota Company on January 1, 2025, under the following terms 1. The lease is to be for 4 years with rental payments of $11,931 to be made at the beginning of each year. 2. The machinery has a fair value of $63,358, a book value of $47,280, and an economic life of 10 years. 3. 4 5. 6. At the end of the lease term, both parties expect the machinery to have a residual value of $23,640. To protect against a large loss, Ivanhoe requests Sarasota to guarantee $16,480 of the residual value, which Sarasota agrees to do. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. The implicit rate is 5%, which is known by Sarasota. Collectibility of the payments is probable. Click here to view factor tables. Your answer is correct Evaluate the criteria for classification of the lease, and describe the nature of the lease For the lessee, it is a Finance lease and for the lessor, it is a sales-type lease v eTextbook and Media List of Accounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
am. 173.
Transcribed Image Text:-Your answer is partially correct.
Prepare the journal entries for Sarasota for the year 2025. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round present
value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 5,275. List all debit entries before
credit entries.)
Date
Account Titles and Explanation
January 1, 2025
Right-of-Use Asset
January 1, 2025
Lease Liability
(To record lease)
Lease Liability
Debit
11931
December 31, 2025
December 31, 2025
Cash
(To records first lease payment)
Interest Expense
Lease Liability
(To record accrued interest)
Amortization Expense
Right-of-Use Asset
(To record amortization expense)
DU
LU
eTextbook and Media
List of Accounts
Transcribed Image Text:Current Attempt in Progress
Ivanhoe Incorporated leases a piece of machinery to Sarasota Company on January 1, 2025, under the following terms
1.
The lease is to be for 4 years with rental payments of $11,931 to be made at the beginning of each year.
2.
The machinery has a fair value of $63,358, a book value of $47,280, and an economic life of 10 years.
3.
4
5.
6.
At the end of the lease term, both parties expect the machinery to have a residual value of $23,640. To protect against a large
loss, Ivanhoe requests Sarasota to guarantee $16,480 of the residual value, which Sarasota agrees to do.
The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset
is not of a specialized nature.
The implicit rate is 5%, which is known by Sarasota.
Collectibility of the payments is probable.
Click here to view factor tables.
Your answer is correct
Evaluate the criteria for classification of the lease, and describe the nature of the lease
For the lessee, it is a
Finance lease
and for the lessor, it is a
sales-type lease v
eTextbook and Media
List of Accounts
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