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 $72,000 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 8%. Winn also paid a $231,000 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. View transaction list 1 Record the beginning of the lease for Winn. 2 Record the advance payment made at the beginning of the lease by Winn. 3 Record the purchase of the leasehold improvements by Winn. 4 Record the lease and interest payment for Winn. 5 Record the amortization for Winn. 6 Record depreciation for Winn. ☑ Vinn. 7 12 bit Credit
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 $72,000 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 8%. Winn also paid a $231,000 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. View transaction list 1 Record the beginning of the lease for Winn. 2 Record the advance payment made at the beginning of the lease by Winn. 3 Record the purchase of the leasehold improvements by Winn. 4 Record the lease and interest payment for Winn. 5 Record the amortization for Winn. 6 Record depreciation for Winn. ☑ Vinn. 7 12 bit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $72,000 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 8%. Winn also paid a $231,000 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.
View transaction list
1 Record the beginning of the lease for Winn.
☑
2
Record the advance payment made at the beginning of
the lease by Winn.
Vinn.
3
Record the purchase of the leasehold improvements by
Winn.
4
Record the lease and interest payment for Winn.
5
Record the amortization for Winn.
6
Record depreciation for Winn.
12
it
Credit
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Step 1: Introduction
VIEWStep 2: Recording for beginning of the lease Jan.2024 :
VIEWStep 3: Recording the advance payment made at beginning:
VIEWStep 4: Recording of Purchase of leasehold improvements on Jan.2024 :
VIEWStep 5: Recording of lease and interest payment 31 dec.2024
VIEWStep 6: Recording of amortization right of use of assets 31 dec. 2024
VIEWStep 7: Recording of depreciation expense:
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