On December 1, 2021, Carlos entered into a lease on a building for use in his business for $1,500 per month. Under the lease terms, Carlos pays 12 months' rent ($18,000) in advance on December 1. How much can Carlos deduct for rent in 2021?
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On December 1, 2021, Carlos entered into a lease on a building for use in his business for $1,500 per month. Under the lease terms, Carlos pays 12 months' rent ($18,000) in advance on December 1. How much can Carlos deduct for rent in 2021?a.$13,000b.$18,000c.$1,000d.$12,000
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- On December 1, 2020, Carlos entered into a lease on a building for use in his business for $1,500 per month. Under the lease terms, Carlos pays 12 months’ rent ($18,000) in advance on December 1. How much can Carlos deduct for rent in 2020? a. $18,000 b. $1,000 c. $13,000 d. $12,000On January 1, 2020, Indigo Animation sold a truck to Peete Finance for $48,000 and immediately leased it back. The truck was carried on Indigo's books at $43,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Indigo at lease-end. The lease requires 5 equal rental payments of $11,707 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 7%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Indigo's 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date Account Titles and Explanation Debit Credit /20 Cash Lease Receivable…On March 1, 2023, Dak Prescott leases and places in service a passenger automobile. The lease will run for five years and the payments are $500 per month. During 2023, he uses his car 60% for business and 40% for personal activities. Assuming the dollar amount from the IRS table for auto leases is $70, determine Dak's gross income attributable to the lease. The car was in service for 305 out of 365 days. a. $0 b. $35 c. $59 d. $70
- Jackson, Inc., an engineering consulting firm, uses the cash method of accounting and is a calendar year taxpayer. Read the requirement. Compute the amount of Jackson's current year deductions for the following transactions: (Enter a "0" if no current year deduction is allowed.) a. On November 1 of the current year, it entered into a lease to rent some office space for five years. The lease agreement states that the lease payments are $14,400 per year, payable in advance each November 1 for the following 12-month period. Under the terms of the lease, Jackson is required to pay a $2,500 deposit, refundable upon the termination of the lease. The deduction amount for transaction a. isOn January 1, 2019, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: • The lease is noncancelable and has a term of 8 years. • The annual rentals are $39,200, payable at the beginning of each year. • The interest rate implicit in the lease is 11%. • Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for $1 at the end of the lease term, December 31, 2026. • The cost of the equipment to the lessor is $145,500, and the fair value is approximately $223,900. • Ballieu incurs no material initial direct costs. • It is probable that Ballieu will collect the lease payments. • Ballieu estimates that the fair value is expected to be significantly greater than $1 at the end of the lease term. Ballieu calculates that the present value on January 1, 2019, of 8 annual payments in advance of $39,200 discounted at…On January 1, 2024, Stone leased an office building. Terms of the lease require Stone to make 20 annual lease payments of $124, 000 beginning on January 1, 2024. An 11% interest rate is implicit in the lease agreement. At what amount should Stone record the lease liability on January 1, 2024, before any lease payments are made? Note: Round your final answers to nearest whole dollar amount. Show less Table, Excel, or calculator function Table, Excel, or calculator function: Payment: n = i : Liability: =
- The lessor company leases a building to the lessee company on 1/1/2021. The lessee will make ten annual rental payments of $77,000 at the beginning of each year, starting from 1/1/2021. Both parties expect a residual value of $17,000 at the end of the lease term, though this amount is not guaranteed. The lessor company set the lease payments with the intent of earning a 10% return, and the lessee is aware of this rate. Suppose the lessee incurs initial direct costs of $4,360 related to the lease. What is the amount for Right-of-Use Asset the lessee will record on 1/1/2021? (You must choose from the following present/future values. Please do not use the tables in the textbook, tables posted on the Blackboard, or values from a financial calculator.) Future Value Single Sum Present Value Single Sum Future Value Ordinary Annuity Present Value Ordinary Annuity Present Value Annuity Due 10%, 10 periods 2.59 0.39 15.94 6.14 6.76Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation. Cash 150,000 Unearned Rent Revenue 150,000 The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft has income tax payable of $230,000 at the end of 2025, and its tax rate is 25%. What amount of income tax expense should Kraft Company report at the end of 2025? 3) _______ A) $267,500 B) $211,250 C) $192,500 D) $117,500On January 1, 2020, a lessee leased an office space with 2 floors, for P1,000,000 payable every January 1, starting next year. The lease term was 3 years, while the useful life of the office space was 4 years. The lessee paid P100,000 as lease bonus. The lessor also reimbursed P30,000 to the lessee. The implicit interest rate is 8% On January 1,2022, due to financial difficulties, the lessee and the lessor agreed to modify the lease as follows: - Only 1 floor will be rented. -The annual lease payments will be reduced to P400,000 -The lease term will be extended for 2 more years -The incremental borrowing rate at this date is 10% QUESTION 1: How much is the interest expense for 2021? QUESTION 2: How much is the gain or loss on partial termination as of date of modification, if any?
- On January 2, 2020, Crane Company sells production equipment to Fargo Inc. for $46,000. Crane includes a 2-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on January 2, 2020. During 2020, Crane incurs costs related to warranties of $930. At December 31, 2020, Crane estimates that $620 of warranty costs will be incurred in the second year of the warranty. Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020 (assuming financial statements are prepared on December 31, 2020). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)On January 1, 2020, Martinez Animation sold a truck to Peete Finance for $44,000 and immediately leased it back. The truck was carried on Martinez’s books at $40,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Martinez at lease-end. The lease requires three equal rental payments of $12,500 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 4%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed.Prepare Martinez’s 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.)Click here to view factor tables. Date Account…