please show the calculations especially the wrong ones. A Your answer is partially correct.Prepare the journal entries that Swifty would make on January 1, 2020, and the adjusting journal entries at December 31, 2020.to record the annual interest income from the lease arrangement, assuming that Swifty has a December 31 fiscal year end. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry forthe account titles and enter O for the amounts. Round answers to O decimal places, eg. 5,275.)DateAccount Titles and ExplanationDebitCreditJan. 1,Cash6752020Lease Receivable2160722282Equipment Acquired for Lessee675Unearned Interest Income22Insurance ExpenseDec. 31,2132Interest Expense20202132Interest Income(To record interest.)Dec. 31,166Interest Receivable2020166Interest Income(To record accrued interest.) On January 1. 2020, Bonita Ltd. entered into an agreement to lease a truck from Swifty Ltd. Both Bonita and Swifty use IFRS 16. Thedetails of the agreement are as follows:Carrying value of truck for Swifty Ltd.$22,282Fair value of truck$22.282Economic life of truck5 yearsLease term3 yearsRental payments (at beginning of each month)$675Executory costs included in rental payments each month for insurance$22Incremental borrowing rate for Bonita Ltd.12%Bonita Ltd. expects to pay Swifty Ltd. $3,470 under a residual value guarantee for the truck.Additional information:1.There are no abnormal risks associated with the collection of lease payments from Bonita.2.There are no additional unreimbursable costs to be incurred by Swifty in connection with the leased truck.At the end of the lease term, Swifty sold the truck to a third party for $3,130, which was the truck's fair value at December31, 2022. Bonita paid Swifty the difference between the guaranteed residual value of $3,470 and the proceeds obtained on3.the resale.4.Bonita knows the interest rate that is implicit in the lease.5.Bonita knows the amount of executory costs included in the minimum lease payments.6.Bonita uses straight-line depreciation for its trucks with the residual value guarantee of $3,470 for the leased truck.E Your answer is partially correct.Prepare the journal entries that Swifty would make on January 1, 2020, and the adjusting journal entries at December 31, 2020,to record the annual interest income from the lease arrangement, assuming that Swifty has a December 31 fiscal year end. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for

Operating Lease: It is the contract for using asset by lessee without transferring the ownership…

Prepare the journal entries that Swifty would make on January 1, 2020, and the adjusting journal entries at December 31, 2020, to record the annual interest income from the lease arrangement, assuming that Swifty has a December 31 fiscal year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1. Cash 675 2020 Lease Receivable 21607 22282 Equipment Acquired for Lessee 675 Unearned Interest Income 22 Insurance Expense Dec. 31, 2132 Interest Expense 2020 2132 Interest Income (To record interest.) Dec. 31, 166 Interest Receivable 2020 166 Interest Income (To record accrued interest.)

Prepare the journal entries that Swifty would make on January 1, 2020, and the adjusting journal entries at December 31, 2020, to record the annual interest income from the lease arrangement, assuming that Swifty has a December 31 fiscal year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1. Cash 675 2020 Lease Receivable 21607 22282 Equipment Acquired for Lessee 675 Unearned Interest Income 22 Insurance Expense Dec. 31, 2132 Interest Expense 2020 2132 Interest Income (To record interest.) Dec. 31, 166 Interest Receivable 2020 166 Interest Income (To record accrued interest.)

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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