Leeche Company entered into a lease agreement with Lessor Company with the following terms on January 1, 2020. Space 2 Floors at 1,500 square meters each Annual rental payable at the end of each year 400,000 Implicit interest rate in the lease 10% Lease term 8 years On January 1, 2023, Leese Company and Lessor Company agreed to amend the original terms of the lease by reducing the annual rental payable at the end of each year by 100,000 and increasing the implicit interest rate in the lease by 2%. REQUIRED: Prepare table of amortization and journal entries for the entire lease term.
Leeche Company entered into a lease agreement with Lessor Company with the following terms on January 1, 2020. Space 2 Floors at 1,500 square meters each Annual rental payable at the end of each year 400,000 Implicit interest rate in the lease 10% Lease term 8 years On January 1, 2023, Leese Company and Lessor Company agreed to amend the original terms of the lease by reducing the annual rental payable at the end of each year by 100,000 and increasing the implicit interest rate in the lease by 2%. REQUIRED: Prepare table of amortization and journal entries for the entire lease term.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Leeche Company entered into a lease agreement with Lessor Company with the following terms on January 1, 2020.
Space 2 Floors at 1,500 square meters each
Annual rental payable at the end of each year 400,000
Implicit interest rate in the lease 10%
Lease term 8 years
On January 1, 2023, Leese Company and Lessor Company agreed to amend the original terms of the lease by reducing the annual rental payable at the end of each year by 100,000 and increasing the implicit interest rate in the lease by 2%.
REQUIRED: Prepare table of amortization and
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