On April 1, Jackson Corporation paid twelve months' rent in advance totaling $24,000. The lease begins on April 1. An adjusted trial balance prepared on September 30 would include a balance in the Prepaid Rent account of: A. $12,000 B. $18,000 C. $6,000 D. $24,000

On April 1, Jackson Corporation paid twelve months' rent in advance totaling $24,000. The lease begins on April 1. An adjusted trial balance prepared on September 30 would include a balance in the Prepaid Rent account of: A. $12,000 B. $18,000 C. $6,000 D. $24,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 4RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...

See similar textbooks

Similar questions

On July 1, 2018, Gee Company leased a delivery truck from Marr Company under a 3-year operating lease. Total rent for the term of the lease will be P360,000 payable as follows: 12 months at P5,000= P60,000 12 months at P7,500= 90,000 12 months at P17,500= 210,000 All payments were made when due. a. What is the rent revenue for the year ended June 30, 2019? b. On June 30,2020, what amount should be reported as accrued rent receivable?
On January 1, Haymark Corporation signs a six-year lease for a truck that is accounted for as a finance lease. The lease requires six $15,252 lease payments (the first at the beginning of the lease and the rest at December 31 of years 1 through 5). The present value of the six annual lease payments, at 6% interest, is $79,500. The lease payment schedule follows. (a) Prepare the January 1 journal entry at the start of the lease to record any asset or liability. (b) Prepare the January 1 journal entry to record the first $15,252 cash lease payment.(a) Prepare the January 1 journal entry at the start of the lease to record any asset or liability. (b) Prepare the January 1 journal entry to record the first $15,252 cash lease payment. (b) Prepare the journal entry to record the cash lease payment at the end of Year 1 and the end of Year 2. (c) Prepare the journal entry made at the end of each year to record straight-line amortization, assuming zero salvage value at the end of the six-year…
A 1,000-square-foot office space is leased at $15.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gross with an expense stop set at $6.65 per square foot, and yearly expenses per square foot are as follows: $6.00, $6.65, and $7.05. The lease provides for two months of free rent at the end of the lease term. If the lease term is three years and the discount rate is 10 percent, what is the effective rent per square foot?
Sun company engaged in leasing a machine for quality control that requires payment of $2000 at the end of each month. The economic life of the machine is five years. sun company normally subject to 6% interest rate per year in business transactions assume lease period is 54 months provide the journal entry that must be made on the date. The lease contract is signed.
Requirement: Provide the journal entries on Jan. 1, 20x1, Jan. 1, 20x3 5. On January 1, 20x3, Foggy Co. subleases the building to Creek Case 2: Sublease as an Operating lease On January 1, 20x1, Foggy Co. enters into a 10-year lease of a Sublease Fact pattern: machine from Bamboo, Inc. The annual·rent is P200,000 payable at the beginning of each year. The building has a remaining useful life of 25 years. The interest rate implicit in the lease is 10%. Case 1: Sublease as a Finance lease 4. On January 1, 20x3, Foggy Co. subleases the building to Creek Co. for 8 years at an annual rent of P208,000 payable at the beginning of each year. The first payment is due on January 1, 20x3. The interest rate implicit in the sublease is 9%. urement: Provide the journal entries on Jan. 1, 20x1, Jan. 1, 20x3 and Dec. 31, 20x3. Case 2: Sublease as an Operating lease beginning of each year. 31, 20x3.
On January 1, 20x1, Lessor leased an office space to Lessee. Payments on the lease will be made as follows: YEAR RENTAL PAYMENT Dec. 31, 20x1 200,000 Dec. 31, 20x2 240,000 Dec. 31, 20x3 260,000 Total 700,000 • As an inducement to enter to the lease, Lessor granted Lesse the first six months of the lease as rent-free. • Additional rent (contingent rent) of 10% is to be paid for excess of sales of Lessee over P2,000,000. Lessee's sales for 20x1, 20x2, and 20x3 are P1,800,000, P2,000,000, and P3,000,000. respectively. Requirement: Provide all journal entries in the books of Lessor.
On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $10,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of years 1, 2, 3, and 4), and the present value of the five annual lease payments is $41,000, based on an 11% interest rate. 1. Prepare the January 1 journal entry Harbor records at inception of the lease for any asset or liability. 2. Prepare the January 1 entry Harbor records for the first $10,000 cash lease payment. 3. If the leased asset has a five-year useful life with no salvage value, prepare the December 31 journal entry Harbor records each year for amortization of the leased asset.
On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same lessee has used the building for the past 5 years, and in each of those years the lessee reached the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two quarters are as follows: Quarter ended Amount March 31 P3,200,000 June 30 3,000,000 What amount of rent income should be reflected in Lessor’s quarterly income statement for the three months ended June 30?
9. Lessee enters into a five-year lease of office space on January 1, and concludes that the agreementis an operating lease. Lessee pays initial direct costs of $5,000. The agreement provides thefollowing:Lease term Five years, with the first payment due at leasecommencement and the remainder annually at the leaseanniversary date thereafterAnnual payments, beginning at leasecommencement and annuallythereafterCommencement – $25,000Year 2 – $26,000Year 3 – $27,000Year 4 -- $28,000Year 5 -- $29,000Discount rate 4.0%Present value (PV) of lease payments $124,645Complete the following table to show the impact on each year of Lessee’s income statement andbalance sheet. Prepare the journal entries for the Lessee at the commencement of the lease and atthe end of year 1.Initial Year 1 Year 2 Year 3 Year 4 Year 5Cash lease paymentsIncome statement:Periodic lease expense(straight-line)Prepaid (accrued) rent forperiodBalance sheet at end ofyear:Lease liabilityROU asset:Lease liabilityAdjust:…
On 01-Jan-23 Smith Ltd contracted to lease a machine for 4 years. Annual lease payments (commencing 31-Dec-23) are £40,000. Annual interest rates are 7.5%. a) b) c) d) Required: Show Smith's lease repayment schedule for this contract. Show the accounting entries required to record Smith's lease at the end of the first year. Amend Smith's balance sheet for 31-Dec-23 (shown below) to include this lease transaction. For Y/e 31-Dec-23, calculate Smith's gearing ratios before and after the addition of the lease transaction. Smith Ltd SFP at 31-Dec-23 £'000 £'000 NCA 200 ISC 250 Reserves 120 CA 350 Profit/Loss 50 NCL CL 100 30 Assets 550 Equity & Liabilities 550
On November 1,2020, ABC Company leased a piece of furniture to XYZ Corporation under a 9-month operating lease. Total rent for the term of the lease will be P36,000, payable as follows:· P5,000 per month for the first 3 months- P15,000· P4,500 per month for the next 3 months- P13,500· P2,500 per month for at least 3 months- P7,500Payments were made in advance on a monthly basis. XYZ uses the calendar year. The monthly entries in the books of ABC Company on February 1, March 1 and April 1, 2021 is?
Help with questions 14,15,16,17