Do the journal entries for the following transactions A lessee enters into a three-year lease and agrees to make the following annual payments at the end of each year: $10,000 in year 1, $15,000 in year 2, and $20,000 in year 3. The initial measurement of the right-of-use (ROU) asset and liability to make lease payments is $38,000 at a discount rate of 8%. At the end of the year, the lessee paid the first installement and recorded the amortisation expense and the interest expense. Amortization expense: $12,667 ($38,000/3) Interest expense: $3,038 ($38,000*.08). Lease liability: ? (You must calculate.)
Do the journal entries for the following transactions A lessee enters into a three-year lease and agrees to make the following annual payments at the end of each year: $10,000 in year 1, $15,000 in year 2, and $20,000 in year 3. The initial measurement of the right-of-use (ROU) asset and liability to make lease payments is $38,000 at a discount rate of 8%. At the end of the year, the lessee paid the first installement and recorded the amortisation expense and the interest expense. Amortization expense: $12,667 ($38,000/3) Interest expense: $3,038 ($38,000*.08). Lease liability: ? (You must calculate.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A lessee enters into a three-year lease and agrees to make the following annual payments at the end of each year: $10,000 in year 1, $15,000 in year 2, and $20,000 in year 3. The initial measurement of the right-of-use (ROU) asset and liability to make lease payments is $38,000 at a discount rate of 8%.
At the end of the year, the lessee paid the first installement and recorded the amortisation expense and the interest expense.
Amortization expense: $12,667 ($38,000/3)
Interest expense: $3,038 ($38,000*.08).
Lease liability: ? (You must calculate.)
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