On January 1, 2020 Venti Company rented out an apartment to Barbatos Company for an operating lease term of 3 years. Any executory costs are responsibility of the Venti. The following items are relevant to the lease: Annual rental payments 250,000 Maintenance & property taxes 30,000 Security deposit 80,000 Requirements: a. What are the journal entries in the books of the Barbatos in 2020? b. What are the journal entries in the books of the Venti in 2020?

On January 1, 2020 Venti Company rented out an apartment to Barbatos Company for an operating lease term of 3 years. Any executory costs are responsibility of the Venti. The following items are relevant to the lease: Annual rental payments 250,000 Maintenance & property taxes 30,000 Security deposit 80,000 Requirements: a. What are the journal entries in the books of the Barbatos in 2020? b. What are the journal entries in the books of the Venti in 2020?

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 9RE: Use the information in RE20-3. Prepare the journal entries that Richie Company (the lessor) would...

See similar textbooks

Similar questions

On June 1, 2021 Maroon Company entered into a 5-year nonrenewable lease, commencing on that date, for office space and made the following collections from the lessee: • Bonus to obtain lease, P300,000 First month's rent, P100,000 • Last month's rent, P100,000 In its income statement for the year ended June 30, 2021, what amount should Maroon report as rent income?
In January 1,2020, Orange Corporation leased a building to Juce Company under a four-year operating lease. The monthly rentals for 2020, 2021, 2022 and 2023 are as follows: P100,000, P150,000, P200,000 and P250,000, respectively. Rentals are payable at the end of each month. All rental payments within the year were made when due. What amount should Orange Corporation report as rent receivable on December 31, 2020?
On April 1, 2021, Primer Corp. signs a five-year lease to use office space. The present value of the monthly lease payments Is $100,000. Record the lease. (If no entry Is requlred for a particular transaction/event, select "No Journal Entry Requlred" in the first account fleld.) View transaction list Journal entry worksheet 1 Record the lease. Note: Enter debits before credits. Date Account Title Debit Credit April 01, 2021 Record entry Clear entry View general journal
Robin Company leased an office to Franky Company for a five-year term beginning January 1, 2020. Under the terms of the operating lease, rent for the first year is P 800,000 and rent for years 2 through 5 is P 1,250,000 per annum. However, as an inducement to enter the lease, Robin Company granted Franky Company the first six months of the lease rent-free. What amount should be reported as rental income for 2020? Show your solution.
On January 1, 2019 Zhavy Co. leased office furniture from Cherry Co. under operating lease. Payments on the will be made as follows: December 31, 2019 230,000 December 31, 2020 250,000 December 31, 2021 270,000 As an inducement to enter the lease, CHERRY CO. granted ZHAVY CO. the first six months of the lease rent-free. SINAG also paid the following: Initial direct cost 100,000 Security deposit 50,000 Lease Bonus 60,000 Insurance and Maintenance cost 25,000 What amount of rental income should be reported in the income statement of CHERRY CO. for the year ended December 31, 2019?
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Swifty Company. The following information relates to this agreement. 1. 2. 3. 4. 5. 6. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. The fair value of the asset at January 1, 2020, is $70,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is guaranteed. The agreement requires equal annual rental payments of $21,827.58 to the lessor, beginning on January 1, 2020. The lessee's incremental borrowing rate is 4%. The lessor's implicit rate is 3% and is unknown to the lessee. Swifty uses the straight-line depreciation method for all equipment. Click here to view factor tables. Prepare all of the journal entries for the lessee for 2020 to record the lease agreement, the lease payments, and all expenses related to this lease.…
Happy Company grants Incredible Company first month rent-free under a 12-month lease for low-value assets such as furniture, tablets, and laptops. The lease is effective August 1, 2021 and provides for a monthly rental of P12,000, payment of which will begin on September 1, 2021.How much is the rent expense reported in Happy Company’s profit or loss for the year ended December 31, 2021?
Ebasan Company leased a building to Bu Corporation on January 1 2021. The lease expires on January 1 2026. The annual rental is P3,000,00D. Additionally, on January 1, 2021, Bu paid P500,000 as a lease bonus and P250,000 as a security deposit to be refunded upon expiration of the lease. Ebasan paid P150,000 to a real estate broker as finder fee. During 2021, Ebasan incurred insurance and property tax expense of P100,000. The building was depreciated P150,000 per year. What amount should Ebasan recognize as net rental revenue for 2021?
25. On January 1, 2019, Rapp company leased a new machine to Lake company. The lease expires on January 1, 2024. The annual rental is 900,000. Additionally on January 1, 2019, Lake company paid 500,000 to Rapp company as a lease bonus and 250,000 as a security deposit to be refunded upon the expiration of the lease. What amount should be reported as rent revenue for the current year?
Use the information pertaining to Laura Leasing Company and Plote Company from E21.15. Assume that the expected residual value at the end of the lease is $10,000, such that the payments are $24,638.87. Instructions Prepare all of the journal entries for the lessee for 2020 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. In E21.15 Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Plote Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $80,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is guaranteed. 4. The agreement requires equal annual…
A lessor leased out an office space for 5 years on January 1, 2020. The lease was properly accounted for as an operating lease. The rental payment are as follows: first to second year - P300,000 per month third to fifth year - P36,000 per month The lease contract provides for a 6-month advance and 1 month security deposit. The lessee also paid a P60,000 lease bonus to obtain the lease. The security deposit will be returned at the end of the lease. The advances may be applied against the last three months of the lease. QUESTION: How much is the rent receivable/ unearned rent as of December 31, 2021? show complete solution please
On December 1, 2023, Oriole Corp. leased office space for 10 years at a monthly rental of $43000, under an operating lease. On that date Oriole paid the landlord the following amounts: Rent deposit $43000 First month's rent 43000 Last month's rent 43000 Installation of new walls and offices 157200 $286200 Oriole debited the entire $286200 payment to Prepaid Rent. How much should Oriole Corp recognize as rent expense for the year ended December 31, 2023? ○ $28620 ○ $44310 ○ $161500 ○ $43000