On December 31, 2020, Brick Co. leases Equipment to House, Inc. Annual Lease Payments made at beginning of Lease year $159,000 Implicit rate Guaranteed Residual Value Expected Residual Value Present value of an annuity due (7%,5) Present value of an ordinary annuity (7%,5) Present value of a single sum (7%,5) 7% $155,500 $56,500 4.38721 4.10020 0.71299 What journal entry would House, Inc. make at December 31, 2020 to record the lease assuming this is a finance lease? O DR Right of Use Asset $768,152; CR Lease Liability $768,152 O DR Right of Use Asset $808,426; CR Lease Liability $808,436 O DR Right of Use Asset $737,850; CR Lease Liability $737,850 O DR Right of Use Asset $626,980; CR Lease Liability $626,980
On December 31, 2020, Brick Co. leases Equipment to House, Inc. Annual Lease Payments made at beginning of Lease year $159,000 Implicit rate Guaranteed Residual Value Expected Residual Value Present value of an annuity due (7%,5) Present value of an ordinary annuity (7%,5) Present value of a single sum (7%,5) 7% $155,500 $56,500 4.38721 4.10020 0.71299 What journal entry would House, Inc. make at December 31, 2020 to record the lease assuming this is a finance lease? O DR Right of Use Asset $768,152; CR Lease Liability $768,152 O DR Right of Use Asset $808,426; CR Lease Liability $808,436 O DR Right of Use Asset $737,850; CR Lease Liability $737,850 O DR Right of Use Asset $626,980; CR Lease Liability $626,980
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On December 31, 2020, Brick Co. leases Equipment to House, Inc.
Annual Lease Payments made at beginning of Lease year $159,000
Implicit rate
Guaranteed Residual Value
Expected Residual Value
Present value of an annuity due (7%,5)
Present value of an ordinary annuity (7%,5)
Present value of a single sum (7%,5)
7%
$155,500
$56,500
4.38721
4.10020
0.71299
What journal entry would House, Inc. make at December 31, 2020 to record the lease
assuming this is a finance lease?
O DR Right of Use Asset $768,152; CR Lease Liability $768,152
O DR Right of Use Asset $808,426; CR Lease Liability $808,436
O DR Right of Use Asset $737,850; CR Lease Liability $737,850
O DR Right of Use Asset $626,980; CR Lease Liability $626,980
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