On January 1, 2020, Flounder Inc. sold computer equipment to Shamrock Co. The sales price of the equipment was $515,000 and its carrying amount is $398,000. Record any journal entries necessary for Flounder from the sale of the computer equipment in 2020. 1/1/20 Cash 515000 Equipment 398000 Gain on Disposal of Equip 117000 Use the information from part a. Assume that, on the same day the sale occurred, Flounder enters into an agreement to lease the equipment from Shamrock for 10 years with annual lease payments of $66,694.90 at the end of each year, beginning on December 31, 2020. If Flounder has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Flounder from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Entry for 1/1/20 12/31/20 Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $66,694.90 at the beginning of each year. Record any journal entries necessary for Flounder from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) 1/1/20 to record sale of equipment 1/1/20 to record the lease 1/1/20 to record lease payment
On January 1, 2020, Flounder Inc. sold computer equipment to Shamrock Co. The sales price of the equipment was $515,000 and its carrying amount is $398,000. Record any
1/1/20 Cash 515000
Equipment 398000
Gain on Disposal of Equip 117000
Use the information from part a. Assume that, on the same day the sale occurred, Flounder enters into an agreement to lease the equipment from Shamrock for 10 years with annual lease payments of $66,694.90 at the end of each year, beginning on December 31, 2020. If Flounder has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Flounder from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.)
Entry for
1/1/20
12/31/20
Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $66,694.90 at the beginning of each year. Record any journal entries necessary for Flounder from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.)
1/1/20 to record sale of equipment
1/1/20 to record the lease
1/1/20 to record lease payment
12/31/20
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