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On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. . The equipment cost Ghosh $956,800 and has an expected useful life of five years. . Ghosh expects the residual value at December 31, 2027, will be $300,800. . Negotiations led to the lessee guaranteeing a $340,800 residual value. • Equal payments under the finance/sales-type lease are $200,800 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 6% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease.

On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. . The equipment cost Ghosh $956,800 and has an expected useful life of five years. . Ghosh expects the residual value at December 31, 2027, will be $300,800. . Negotiations led to the lessee guaranteeing a $340,800 residual value. • Equal payments under the finance/sales-type lease are $200,800 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 6% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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s On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. • The equipment cost Ghosh $956,800 and has an expected useful life of five years. • Ghosh expects the residual value at December 31, 2027, will be $300,800. . Negotiations led to the lessee guaranteeing a $340,800 residual value. Equal payments under the finance/sales-type lease are $200,800 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 6% interest rate when calculating lease payments. . Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease. Complete this question by entering your answers in the tabs below. Required 11 Required 2 Prepare the appropriate entries for both Karrier and Ghosh on January 1, 202, to record the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first acc nearest whole dollar
Transcribed Image Text:s On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. • The equipment cost Ghosh $956,800 and has an expected useful life of five years. • Ghosh expects the residual value at December 31, 2027, will be $300,800. . Negotiations led to the lessee guaranteeing a $340,800 residual value. Equal payments under the finance/sales-type lease are $200,800 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 6% interest rate when calculating lease payments. . Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease. Complete this question by entering your answers in the tabs below. Required 11 Required 2 Prepare the appropriate entries for both Karrier and Ghosh on January 1, 202, to record the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first acc nearest whole dollar
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