On January 1, 2020, ABC Company (lessee) leased a machine from Bank XYZ under a 12-month lease. ABC did not record a Right of Use Asset for this agreement. The lease requires ABC to make a single total annual payment of $24,000 on January 1, 202O. The machine was purchased by XYZ Bank on January 1, 2020 at a cost of $70,000 and is expected to have a useful life of 5 years with no expected residual value. Request: Prepare the proper journal entries for lessee ABC (Be sure to show all calculations to receive full punctuation) 1.Journal entry for 1/1/20 2. Journal Entries for 12/31/20
On January 1, 2020, ABC Company (lessee) leased a machine from Bank XYZ under a 12-month lease. ABC did not record a Right of Use Asset for this agreement. The lease requires ABC to make a single total annual payment of $24,000 on January 1, 202O. The machine was purchased by XYZ Bank on January 1, 2020 at a cost of $70,000 and is expected to have a useful life of 5 years with no expected residual value. Request: Prepare the proper journal entries for lessee ABC (Be sure to show all calculations to receive full punctuation) 1.Journal entry for 1/1/20 2. Journal Entries for 12/31/20
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Accounting
On January 1, 2020, ABC Company (lessee) leased a machine from Bank XYZ
under a 12-month lease.
ABC did not record a Right of Use Asset for this agreement.
The lease requires ABC to make a single total annual payment of $24,000 on
January 1, 2020.
The machine was purchased by XYZ Bank on January 1, 2020 at a cost of
$70,000 and is expected to have a useful life of 5 years with no expected
residual value.
Request:
Prepare the proper journal entries for lessee ABC (Be sure to show all
calculations to receive full punctuation)
1.Journal entry for 1/1/20
2. Journal Entries for 12/31/20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15a64bf7-614c-41b7-a2a5-456826ac0edb%2F17697a53-4bab-449f-ac8d-422b5da261c7%2Fliafyzj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Accounting
On January 1, 2020, ABC Company (lessee) leased a machine from Bank XYZ
under a 12-month lease.
ABC did not record a Right of Use Asset for this agreement.
The lease requires ABC to make a single total annual payment of $24,000 on
January 1, 2020.
The machine was purchased by XYZ Bank on January 1, 2020 at a cost of
$70,000 and is expected to have a useful life of 5 years with no expected
residual value.
Request:
Prepare the proper journal entries for lessee ABC (Be sure to show all
calculations to receive full punctuation)
1.Journal entry for 1/1/20
2. Journal Entries for 12/31/20
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