On January 2, 2022, Sylvester Metals Co. leased a mining machine from EDH Leasing Corp. Assume the lease qualifies as an operating lease under ASPE standards. The annual payments are $4,000 paid at the end of each year, and the life of the lease is 10 years. What entry would Sylvester make when the machine is delivered by EDH?
On January 2, 2022, Sylvester Metals Co. leased a mining machine from EDH Leasing Corp. Assume the lease qualifies as an operating lease under ASPE standards. The annual payments are $4,000 paid at the end of each year, and the life of the lease is 10 years. What entry would Sylvester make when the machine is delivered by EDH?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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19.
On January 2, 2022, Sylvester Metals Co. leased a mining machine from EDH Leasing Corp. Assume the lease qualifies as an operating lease under ASPE standards. The annual payments are $4,000 paid at the end of each year, and the life of the lease is 10 years. What entry would Sylvester make when the machine is delivered by EDH?
a.
Leased Assets40,000
Lease Liability40,000
b.
Leased Assets40,000
Prepaid Rent40,000
c.No entry is necessary.
d.
Prepaid Rent40,000
Lease Liability40,000
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