On July 1, Madison Corporation paid twelve months' rent in advance totaling $18,000. The lease begins on July 1. An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Rent account of: A. $9,000 B. $4,500 C. $13,500 D. $18,000

On July 1, Madison Corporation paid twelve months' rent in advance totaling $18,000. The lease begins on July 1. An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Rent account of: A. $9,000 B. $4,500 C. $13,500 D. $18,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 4RE: Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the...

See similar textbooks

Similar questions

On January 1, Haymark Corporation signs a six-year lease for a truck that is accounted for as a finance lease. The lease requires six $15,252 lease payments (the first at the beginning of the lease and the rest at December 31 of years 1 through 5). The present value of the six annual lease payments, at 6% interest, is $79,500. The lease payment schedule follows. (a) Prepare the January 1 journal entry at the start of the lease to record any asset or liability. (b) Prepare the January 1 journal entry to record the first $15,252 cash lease payment.(a) Prepare the January 1 journal entry at the start of the lease to record any asset or liability. (b) Prepare the January 1 journal entry to record the first $15,252 cash lease payment. (b) Prepare the journal entry to record the cash lease payment at the end of Year 1 and the end of Year 2. (c) Prepare the journal entry made at the end of each year to record straight-line amortization, assuming zero salvage value at the end of the six-year…
On July 1, 2020, Shroff Company leased a warehouse building under a 10-year lease agreement. The lease requires quarterly lease payments of $4,500. The first lease payment is due on September 30, 2020. The lease was reported as a finance lease using an 8% annual interest rate. a. Prepare the journal entry to record the commencement of the lease on July 1, 2020. b. Prepare the journal entries that would be necessary on September 30 and December 31, 2020. c. Post the entries from parts a and b in their appropriate T-accounts. d. Prepare a financial statement effects template to show the effects template to show the effects of the entries from parts a and b on the balance sheet and income statement.
Marie Company grants Lyn Company first three months rent-free under a three-year operating lease. The lease is effective April 1, 2021 and provides for a monthly rental of P12,000, payment of which will begin on July 1, 2021. How much is the rent income reported in Marie Company’s profit or loss for the year ended December 31, 2021? 99,00072,000144,000108,000
I need help with this problem and accounting question
On July 1, 2018, Gee Company leased a delivery truck from Marr Company under a 3-year operating lease. Total rent for the term of the lease will be P360,000 payable as follows: 12 months at P5,000= P60,000 12 months at P7,500= 90,000 12 months at P17,500= 210,000 All payments were made when due. a. What is the rent revenue for the year ended June 30, 2019? b. On June 30,2020, what amount should be reported as accrued rent receivable?
A 1,000-square-foot office space is leased at $15.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gross with an expense stop set at $6.65 per square foot, and yearly expenses per square foot are as follows: $6.00, $6.65, and $7.05. The lease provides for two months of free rent at the end of the lease term. If the lease term is three years and the discount rate is 10 percent, what is the effective rent per square foot?
The GAP Inc. discloses the following schedule to its fiscal 2018 (ended February 2, 2019) 10-K report relating to its leasing to its leasing activities. Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. The aggregate minimum noncancelable annual lease payments under leases in effect on February 2, 2019, are as follows: Fiscal Year ($ millions) 2019 $1,098 2020 1,043 2021 847 2022 694 2023 512 Thereafter Total minimum lease commitments $5,638 1,444 Compute the present value of GAP's operating leases using the following assumptions Assmption Discount rate Round remaining lease term to the nearest whole year Year Present Value 1 $ 0 2 0 3 0 4 0 5 0 >5 0 $ 0 6%
On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $10,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of years 1, 2, 3, and 4), and the present value of the five annual lease payments is $41,000, based on an 11% interest rate. 1. Prepare the January 1 journal entry Harbor records at inception of the lease for any asset or liability. 2. Prepare the January 1 entry Harbor records for the first $10,000 cash lease payment. 3. If the leased asset has a five-year useful life with no salvage value, prepare the December 31 journal entry Harbor records each year for amortization of the leased asset.
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 $102,000 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 $183,000 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 $285,000. 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,…
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,…
On January 1, 20x1, Lessor leased an office space to Lessee. Payments on the lease will be made as follows: YEAR RENTAL PAYMENT Dec. 31, 20x1 200,000 Dec. 31, 20x2 240,000 Dec. 31, 20x3 260,000 Total 700,000 • As an inducement to enter to the lease, Lessor granted Lesse the first six months of the lease as rent-free. • Additional rent (contingent rent) of 10% is to be paid for excess of sales of Lessee over P2,000,000. Lessee's sales for 20x1, 20x2, and 20x3 are P1,800,000, P2,000,000, and P3,000,000. respectively. Requirement: Provide all journal entries in the books of Lessor.
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 $93,000 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 $204,000 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 $297,000. 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,…