On January 1, 2024, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 2% of Taco King's sales revenue, with a quarterly sales minimum of $490,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous five-year period, Taco King has generated quarterly sales of over $695,000. Fogelman's interest rate, known by Taco King, was 8%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. 2. Prepare the journal entries for Taco King on April 1, 2024. First quarter sales were $705,000. Amortization is recorded quarterly. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. Note: 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 Journal entry worksheet < 1 2 Record the beginning of the lease for Taco King. Note: Enter debits before credits. Date January 01, 2024 Record entry General Journal Clear entry < Required 1 Debit Credit View general journal Required 2 > >
On January 1, 2024, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 2% of Taco King's sales revenue, with a quarterly sales minimum of $490,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous five-year period, Taco King has generated quarterly sales of over $695,000. Fogelman's interest rate, known by Taco King, was 8%. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. 2. Prepare the journal entries for Taco King on April 1, 2024. First quarter sales were $705,000. Amortization is recorded quarterly. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. Note: 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 Journal entry worksheet < 1 2 Record the beginning of the lease for Taco King. Note: Enter debits before credits. Date January 01, 2024 Record entry General Journal Clear entry < Required 1 Debit Credit View general journal Required 2 > >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2024, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable
lease payments equal to 2% of Taco King's sales revenue, with a quarterly sales minimum of $490,000. Payments at the beginning of
each quarter are based on previous quarter sales. During the previous five-year period, Taco King has generated quarterly sales of
over $695,000. Fogelman's interest rate, known by Taco King, was 8%.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024.
2. Prepare the journal entries for Taco King on April 1, 2024. First quarter sales were $705,000. Amortization is recorded quarterly.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024.
Note: 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
Journal entry worksheet
<
1
2
Record the beginning of the lease for Taco King.
Note: Enter debits before credits.
Date
January 01, 2024
Record entry
General Journal
Clear entry
< Required 1
Debit
Credit
View general journal
Required 2 >
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