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On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. • Aqua and Maywood expect the residual value at December 31, 2027, to be $70,000. Negotiations led to Maywood guaranteeing a $100,000 residual value. Equal payments under the lease are $140,000 and are due on December 31 of each year with the first paymen made on December 31, 2024. Maywood is aware that Aqua used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lea Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. our final answers to the nearest whole dollar.

On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. • Aqua and Maywood expect the residual value at December 31, 2027, to be $70,000. Negotiations led to Maywood guaranteeing a $100,000 residual value. Equal payments under the lease are $140,000 and are due on December 31 of each year with the first paymen made on December 31, 2024. Maywood is aware that Aqua used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lea Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. our final answers to the nearest whole dollar.

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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On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. Aqua and Maywood expect the residual value at December 31, 2027, to be $70,000. • Negotiations led to Maywood guaranteeing a $100,000 residual value. • Equal payments under the lease are $140,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Maywood is aware that Aqua used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar. View transaction list N No 1 2 View journal entry worksheet Date January 01, 2024 December 31, 2024 General Journal Right-of-use asset Lease payable Amortization expense Right-of-use asset Debit Credit
Transcribed Image Text:On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. Aqua and Maywood expect the residual value at December 31, 2027, to be $70,000. • Negotiations led to Maywood guaranteeing a $100,000 residual value. • Equal payments under the lease are $140,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Maywood is aware that Aqua used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar. View transaction list N No 1 2 View journal entry worksheet Date January 01, 2024 December 31, 2024 General Journal Right-of-use asset Lease payable Amortization expense Right-of-use asset Debit Credit
1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar. View transaction list No 1 2 3 View journal entry worksheet Date January 01, 2024 December 31, 2024 December 31, 2024 General Journal Right-of-use asset Lease payable Amortization expense Right-of-use asset Interest expense Lease payable Cash Debit Credit 140,000
Transcribed Image Text:1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar. View transaction list No 1 2 3 View journal entry worksheet Date January 01, 2024 December 31, 2024 December 31, 2024 General Journal Right-of-use asset Lease payable Amortization expense Right-of-use asset Interest expense Lease payable Cash Debit Credit 140,000
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