M leased a machine on 11-01-19. The machine's estimated useful life is 3 years. The non-cancelable lease required M tomake 3 monthly lease payments of $10,000 every month with the finst lease payment occurring on 12-01-19. M's incrementalborrowing rate is 3%. At the end of the lease, M will return the machine to the lessor. Muses the straight-line depreciation method (noresidual value). M only prepares AJES every December 31. Prepare the lease-related entries C should make on:a) 11-01-19b) 12-01-1912-31-19c)d) 01-01-20e) 02-01-20

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make 3 monthly lease payments of $10, borrowing rate is 3%. At the end of the residual value). M only prepares AJES e a) 11-01-19 b) 12-01-19 c) 12-31-19

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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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

M leased a machine on 11-01-19. The machine's estimated useful life is 3 years. The non-cancelable lease required M to
make 3 monthly lease payments of $10,000 every month with the finst lease payment occurring on 12-01-19. M's incremental
borrowing rate is 3%. At the end of the lease, M will return the machine to the lessor. Muses the straight-line depreciation method (no
residual value). M only prepares AJES every December 31. Prepare the lease-related entries C should make on:
a) 11-01-19
b) 12-01-19
12-31-19
c)
d) 01-01-20
e) 02-01-20

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