E21.10 (LO 2) (Lessee Entries with Bargain Purchase Option) The following facts pertain to a non-cancelable lease agreement between Mooney Leasing and Choi Group, a lessee (amounts in thousands). Commencement date May 1, 2022 Annual lease payment due at the beginning of each year, beginning ¥20,471.94 with May 1, 2022 Bargain purchase option price at end of lease term ¥4,000.00 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost ¥65,000.00| Fair value of asset at May 1, 2022 ¥91,000.00| Lessor's implicit rate 8% Lessee's incremental borrowing rate 8% The collectibility of the lease payments by Mooney is probable. Instructions (Round all numbers to the nearest yen.) a. Prepare a lease amortization schedule for Choi for the 5-year lease term. b. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2022 and 2023. Choi's annual accounting period ends on December 31. Reversing entries are used by Choi.

E21.10 (LO 2) (Lessee Entries with Bargain Purchase Option) The following facts pertain to a non-cancelable lease agreement between Mooney Leasing and Choi Group, a lessee (amounts in thousands). Commencement date May 1, 2022 Annual lease payment due at the beginning of each year, beginning ¥20,471.94 with May 1, 2022 Bargain purchase option price at end of lease term ¥4,000.00 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost ¥65,000.00| Fair value of asset at May 1, 2022 ¥91,000.00| Lessor's implicit rate 8% Lessee's incremental borrowing rate 8% The collectibility of the lease payments by Mooney is probable. Instructions (Round all numbers to the nearest yen.) a. Prepare a lease amortization schedule for Choi for the 5-year lease term. b. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2022 and 2023. Choi's annual accounting period ends on December 31. Reversing entries are used by Choi.

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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