Leese Company entered into a lease agreement with Lessor Company with the following terms on January 1, 2020. Floor space 2,000 square meters Annual rental payable at end of each year 200,000 Implicit interest rate in the lease 10% Lease term 6 years On January 1, 2023, Leese Company and Lessor Company agreed to amend the original terms of the lease with following arrangement: Additional floor space 4,000 square meters Annual rental payable at end of each year (current market rent) 450,000 Implicit interest rate in the lease 8% REQUIRED: Prepare table of amortization and journal entries for the entire lease term.
Leese Company entered into a lease agreement with Lessor Company with the following terms on January 1, 2020. Floor space 2,000 square meters Annual rental payable at end of each year 200,000 Implicit interest rate in the lease 10% Lease term 6 years On January 1, 2023, Leese Company and Lessor Company agreed to amend the original terms of the lease with following arrangement: Additional floor space 4,000 square meters Annual rental payable at end of each year (current market rent) 450,000 Implicit interest rate in the lease 8% 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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PROBLEM 9: LEASE MODIFICATION as a Separate Lease
Leese Company entered into a lease agreement with Lessor Company with the following terms on January 1, 2020. Floor space 2,000 square meters Annual rental payable at end of each year 200,000 Implicit interest rate in the lease 10% Lease term 6 years On January 1, 2023, Leese Company and Lessor Company agreed to amend the original terms of the lease with following arrangement: Additional floor space 4,000 square meters Annual rental payable at end of each year (current market rent) 450,000 Implicit interest rate in the lease 8% REQUIRED: Prepare table of amortization and
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