On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $ 78,000 each, beginning December 31, 2024, and on each December 31 through 2026. The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 5%. Winn also paid a $ 225,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $ 303, 000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. 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: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. 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. 2*10 [ December 31,; 2026] Interest expense Lease payable 11 [ December 31,; 2026] Amortization expense
On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $ 78,000 each, beginning December 31, 2024, and on each December 31 through 2026. The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 5%. Winn also paid a $ 225,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $ 303, 000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. 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: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. 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. 2*10 [ December 31,; 2026] Interest expense Lease payable 11 [ December 31,; 2026] Amortization expense
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Only typed solution
![On January 1, 2024, Winn Heat Transfer leased office space under a three-year
operating lease agreement. The arrangement specified three annual lease payments
of $ 78,000 each, beginning December 31, 2024, and on each December 31 through
2026. The lessor, HVAC Leasing, calculates lease payments based on an annual
interest rate of 5%. Winn also paid a $ 225,000 advance payment at the beginning
of the lease. With permission of the owner, Winn made structural modifications to the
building before occupying the space at a cost of $ 303,000. The useful life of the
building and the structural modifications were estimated to be 30 years with no
residual value. 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: Prepare the appropriate
entries for Winn Heat Transfer from the beginning of the lease through the end of
2026. Winn's fiscal year is the calendar year. 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. 2*10 [ December 31,; 2026] Interest
expense Lease payable 11 [ December 31,; 2026] Amortization expense](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f5ba5c3-8733-4bac-acb6-7def9d10492b%2F1451d432-42c7-494d-8bce-400eb939c6c5%2Frsfysy7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2024, Winn Heat Transfer leased office space under a three-year
operating lease agreement. The arrangement specified three annual lease payments
of $ 78,000 each, beginning December 31, 2024, and on each December 31 through
2026. The lessor, HVAC Leasing, calculates lease payments based on an annual
interest rate of 5%. Winn also paid a $ 225,000 advance payment at the beginning
of the lease. With permission of the owner, Winn made structural modifications to the
building before occupying the space at a cost of $ 303,000. The useful life of the
building and the structural modifications were estimated to be 30 years with no
residual value. 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: Prepare the appropriate
entries for Winn Heat Transfer from the beginning of the lease through the end of
2026. Winn's fiscal year is the calendar year. 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. 2*10 [ December 31,; 2026] Interest
expense Lease payable 11 [ December 31,; 2026] Amortization expense
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
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