On 1/1/24, Half Inc entered into a lease agreement with Holes Co. Half leased a machine from Holes for 9 years. The estimated useful life of the machine is 9 years. At the end of the 9 year lease term, ownership of the machine will transfer back to Holes. The lease agreement calls for annual payments of $150,000, to begin on 1/1/24 and continue every January 1. The borrowing rate is 10%. The present value of the lease payments is $949,500. Half's year end is 12/31. Show all computations. a. Prepare a lease amortization table for 1/1/24, 1/1/25 & 1/1/26. (3 years only) b. Prepare journal entries for Half (lessee finance lease) for 1/1/24, 12/31/24 & 1/1/25.

On 1/1/24, Half Inc entered into a lease agreement with Holes Co. Half leased a machine from Holes for 9 years. The estimated useful life of the machine is 9 years. At the end of the 9 year lease term, ownership of the machine will transfer back to Holes. The lease agreement calls for annual payments of $150,000, to begin on 1/1/24 and continue every January 1. The borrowing rate is 10%. The present value of the lease payments is $949,500. Half's year end is 12/31. Show all computations. a. Prepare a lease amortization table for 1/1/24, 1/1/25 & 1/1/26. (3 years only) b. Prepare journal entries for Half (lessee finance lease) for 1/1/24, 12/31/24 & 1/1/25.

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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