On January 1, 2021, QuickStream Communications leased telephone equipment from Digium, Inc. Digium's cash selling price for the equipment is $1,433,093. The lease agreement specifies six annual payments of $310,000 beginning December 31, 2021, and at each December 31 thereafter through 2026. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or (b) 2%. The CPI at the beginning of the lease is 100. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 8%. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list
On January 1, 2021, QuickStream Communications leased telephone equipment from Digium, Inc. Digium's cash selling price for the equipment is $1,433,093. The lease agreement specifies six annual payments of $310,000 beginning December 31, 2021, and at each December 31 thereafter through 2026. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or (b) 2%. The CPI at the beginning of the lease is 100. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 8%. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list
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
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 7C: On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial...
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![On January 1, 2021, QuickStream Communications leased telephone equipment from Digium, Inc. Digium's cash selling price for the
equipment is $1,433,093. The lease agreement specifies six annual payments of $310,000 beginning December 31, 2021, and at each
December 31 thereafter through 2026. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies
that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or
(b) 2%. The CPI at the beginning of the lease is 100. Digium routinely leases equipment to other firms. The interest rate in these lease
arrangements is 8%. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables
provided.)
Required:
Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2021. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest
whole dollar amount.)
View transaction list](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F888e7003-75d7-4a47-9835-794e087c3e5a%2F475cc2ac-409e-4d8f-b7f3-6d68f01dc84b%2Fszlpl3q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2021, QuickStream Communications leased telephone equipment from Digium, Inc. Digium's cash selling price for the
equipment is $1,433,093. The lease agreement specifies six annual payments of $310,000 beginning December 31, 2021, and at each
December 31 thereafter through 2026. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies
that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or
(b) 2%. The CPI at the beginning of the lease is 100. Digium routinely leases equipment to other firms. The interest rate in these lease
arrangements is 8%. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables
provided.)
Required:
Prepare the appropriate journal entries for QuickStream to record the lease at its beginning date of January 1, 2021. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest
whole dollar amount.)
View transaction list
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