On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a seven-year period with an option to extend the lease for three years. Rick's had no significant economic Incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $16,500 due on December 31 of each year, calculated by the lessor using a 4% Interest rate. The agreement is considered an operating lease. (FV of $1. PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare Rick's Journal entry to record for the right-of-use asset and lease llability at January 1, 2021. 2. Prepare the journal entries to record Interest and amortization at December 31, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare Rick's journal entry to record for the right-of-use asset and lease liability at January 1, 2021. (If no entry is requir transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole do View transaction list Journal entry worksheet र 1 Record the beginning of the lease for Rick's. Note: Enter debits before credits. Date January 01, 2021 General Journal Debit Credit
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a seven-year period with an option to extend the lease for three years. Rick's had no significant economic Incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $16,500 due on December 31 of each year, calculated by the lessor using a 4% Interest rate. The agreement is considered an operating lease. (FV of $1. PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare Rick's Journal entry to record for the right-of-use asset and lease llability at January 1, 2021. 2. Prepare the journal entries to record Interest and amortization at December 31, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare Rick's journal entry to record for the right-of-use asset and lease liability at January 1, 2021. (If no entry is requir transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole do View transaction list Journal entry worksheet र 1 Record the beginning of the lease for Rick's. Note: Enter debits before credits. Date January 01, 2021 General Journal Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a seven-year period with an option to
extend the lease for three years. Rick's had no significant economic Incentive as of the beginning of the lease to
exercise the 3-year extension option. Annual lease payments are $16,500 due on December 31 of each year,
calculated by the lessor using a 4% Interest rate. The agreement is considered an operating lease. (FV of $1. PV of
$1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Prepare Rick's Journal entry to record for the right-of-use asset and lease llability at January 1, 2021.
2. Prepare the Journal entries to record Interest and amortization at December 31, 2021.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare Rick's journal entry to record for the right-of-use asset and lease liability at January 1, 2021. (If no entry is requir
transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole do
View transaction list
Journal entry worksheet
{
1
Record the beginning of the lease for Rick's.
Note: Enter debits before credits.
Date
January 01, 2021
General Journal
Debit
Credit
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education