There are 7 account titles, not 2. **General Journal Format Explanation**The image depicts a blank template for a General Journal, a fundamental tool in accounting used to record all business transactions in chronological order. Understanding its components is essential for anyone learning accounting.**Components of the General Journal:**1. **Date:** - This column is used to record the date of each transaction.2. **Account Title:** - This section is where the name of the accounts involved in each transaction is listed. The account that is debited is usually listed first, followed by the account that is credited.3. **Post Ref.:** - Short for Post Reference, this column is used to indicate the ledger account number to which the debit or credit amount is posted. It helps in tracking entries to their respective ledger accounts.4. **Debit:** - The amounts debited are recorded in this column. Debits increase asset or expense accounts, or decrease liability, equity, or revenue accounts.5. **Credit:** - The amounts credited are recorded in this column. Credits increase liability, equity, or revenue accounts, or decrease asset or expense accounts.The template shows rows numbered from 1 to 6, allowing for multiple transactions to be recorded.This structured format ensures that all necessary information regarding transactions is recorded systematically, facilitating accurate record-keeping and financial analysis. **Instructions**Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the lessor) on January 1 of Year 1. The following information pertains to this lease agreement:1. The equipment reverts back to the lessor at the end of the lease, and there is no bargain purchase option.2. The lease term is 8 years and requires annual payments of $10,000 at the beginning of each year.3. The fair value of the equipment at lease inception is $100,000. Assume that the present value of lease payments discounted at a 10% interest rate is $58,684.19.4. The equipment has an estimated economic life of 20 years and has zero residual value at the end of this time.**Required:**Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.

The operating lease liability is recognized at present value and interest is charged on the lease…

Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the lessor) on January 1 of Year 1. The following information pertains to this lea agreement: 1. The equipment reverts back to the lessor at the end of the lease, and there is no bargain purchase option. 2. The lease term is 8 years and requires annual payments of $10,000 at the beginning of each year. 3. The fair value of the equipment at lease inception is $100,000. Assume that the present value of lease payments discounted at a 10% interest rate is $58,684.19. A 4. The equipment has an estimated economic life of 20 years and has zero residual value at the end of this time. Required: Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.

Keller Corporation (the lessee) entered into a general equipment lease with Dallo Company (the lessor) on January 1 of Year 1. The following information pertains to this lea agreement: 1. The equipment reverts back to the lessor at the end of the lease, and there is no bargain purchase option. 2. The lease term is 8 years and requires annual payments of $10,000 at the beginning of each year. 3. The fair value of the equipment at lease inception is $100,000. Assume that the present value of lease payments discounted at a 10% interest rate is $58,684.19. A 4. The equipment has an estimated economic life of 20 years and has zero residual value at the end of this time. Required: Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.

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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