Answered: Prepare Lenovo’s January 1.… | bartleby

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume that Lenovo(CHN) leased equipment that was carried at a cost of ¥ 150.000,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1,2015, with equal rental payments of ¥30.044,000 at the beginning of each year. All executory costs are paid by Swander directly to third parties. The fair Value of the equipment at the inception of the lease is ¥150.000,000. The equipment has a useful life of 6 years with no residual value. The lease has an implicit interest rate of 8%, no bargain-purchase option, and no transfer of title. Prepare Lenovo’s January 1. 2015.Journal entries at the inception of the lease.

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