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 $60,000 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 $180,000 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 $240,000. 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. (EV of $1. PV of $1, FVA of $1, PVA of $1, EVAD 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 Journal entry worksheet < Record the beginning of the lease for Winn. Note: Enter debits before credits. Date January 01, 2024 Right-of-use asset Lease payable General Journal Record entry Clear entry Debit 12 Credit View general journal
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 $60,000 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 $180,000 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 $240,000. 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. (EV of $1. PV of $1, FVA of $1, PVA of $1, EVAD 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 Journal entry worksheet < Record the beginning of the lease for Winn. Note: Enter debits before credits. Date January 01, 2024 Right-of-use asset Lease payable General Journal Record entry Clear entry Debit 12 Credit View general journal
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 $60,000 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 $180,000 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 $240,000. 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
Journal entry worksheet
Record the beginning of the lease for Winn.
Note: Enter debits before credits.
Date
January 01, 2024 Right-of-use asset
Lease payable
Record entry
5
General Journal
Clear entry
Debit
12
Credit
View general journal
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