Date Current Attempt in Progress On January 1, 2022, Carla Vista Inc., a construction company, leased an excavator from Sandhill Inc. The lease terms are as follows: ● ● ● Annual lease payments of $28,300 at the beginning of each year for five years At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $11,400 The incremental borrowing rate is 8% and the implicit rate in the lease is 7% (known by the lessee) Carla Vista Inc. has a December 31 year end Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Account Titles and Explanation (To record depreciation) (To record interest) Debit Credit

Date Current Attempt in Progress On January 1, 2022, Carla Vista Inc., a construction company, leased an excavator from Sandhill Inc. The lease terms are as follows: ● ● ● Annual lease payments of $28,300 at the beginning of each year for five years At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $11,400 The incremental borrowing rate is 8% and the implicit rate in the lease is 7% (known by the lessee) Carla Vista Inc. has a December 31 year end Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Account Titles and Explanation (To record depreciation) (To record interest) Debit Credit

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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Answer is $1,818 Please explain the reasoning and calculations
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needed: lease liabilityright of use of assetdepreciation expenseplease use a table for explaining lease liab.
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Eastern Edison Company leased equipment from Low-Tech Leasing on January 1, 2018. Low-Tech recently purchased the equipment at a cost of $366,951. Other information: 5 years $88,000 on January 1 each year 5 years Lease term Annual payments Life of asset Fair value of asset $366,951 Implicit interest rate 10% Incrementa1 rate 10% There is no expected residual value. Required: Prepare appropriate journal entries for Low-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet 1 2 3 Record the entry at the inception of the lease. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018
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Recording Lease ObligationsE17B. Business Application ▶ Soong Corporation has leased a piece of equipmentthat has a useful life of 12 years. This capital lease requires payments of $43,000 per yearfor 12 years. Soong currently is able to borrow money at a long-term interest rate of8 percent. (Round to the nearest dollar.)1. Calculate the present value of the lease.2. Prepare the journal entry to record the lease agreement.3. Prepare the journal entry to record depreciation of the equipment for the first yearusing the straight-line method.4. Prepare the journal entries to record the lease payments for the first two years.
The trial balance of Pacilio Security Services, Inc. as of January 1, Year 2, was as follows: Cash $ 8,500 Land 4,000 Notes Payable 5,000 Common Stock 6,000 Retained Earnings 1,500 During Year 2, Pacilio Security Services experienced the following transactions: Acquired an additional $2,000 from the issue of common stock. Paid $3,000 on the debt owed to the Small Business Government Agency. The loan is interest-free. Performed $21,000 of security services for numerous local events during the year; $15,000 was on account and $6,000 was cash. On May 1, rented a small office building. Paid $2,400 for 12 months’ rent in advance. Purchased supplies on account for $650. Paid salaries expense for the year of $8,000. Incurred other operating expenses on account, $6,200. On September 1, Year 2, a customer paid $600 for services to be provided over the next six months. Collected $13,500 of accounts receivable during the year. Paid $5,800 on…
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