Required 1 Required 2Prepare the journal entry, if any, on January 1 and on December 31 of the third year, 2026 for the lessee to account for thereassessment.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round yourintermediate and final answers to nearest whole dollar.No123DateJanuary 01, 2026 Right-of-use assetLease payableDecember 31, 202 Interest expenseLease payableCashGeneral JournalDecember 31, 202 Amortization expenseRight-of-use asset< Required 1✓33 3Debit64,6942,588 X27,412 XRequired 2 >Credit64,69430,000 On January 1, 2024, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease forthree years.• Rick's had no significant economic incentive as of the beginning of the lease to exercise the three-year extension option. Annuallease payments are $30,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate.The expected useful life of the asset is nine years, and its fair value is $225,000.• Assume that at the beginning of the third year, January 1, 2026, Rick's had made significant improvements to the truck whosecost could be recovered only if it exercises the extension option, creating an expectation that extension of the lease was"reasonably certain."• The relevant interest rate at that time was 5%.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:1. Prepare the journal entry, if any, on January 1 and on December 31 of the third year, 2026 for the lessee to account for thereassessment.2. Prepare the journal entry, if any, on January 1 and on December 31 of the third year, 2026 for the lessor to account for thereassessment.

"Lease" is a contract where one party leases it's assets such as land, property, equipment to…

Prepare the journal entry, if any, on January 1 and on December 31 of the third year, 2026 for the lessee to account for the reassessment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar. No 1 2 3 Date January 01, 2026 Right-of-use asset Lease payable December 31, 202 Interest expense Lease payable Cash General Journal December 31, 202 Amortization expense Right-of-use asset 33 33 3 › › Debit 64,694✔ 2,588 X 27,412 x Credit 64,694 30,000

Prepare the journal entry, if any, on January 1 and on December 31 of the third year, 2026 for the lessee to account for the reassessment. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar. No 1 2 3 Date January 01, 2026 Right-of-use asset Lease payable December 31, 202 Interest expense Lease payable Cash General Journal December 31, 202 Amortization expense Right-of-use asset 33 33 3 › › Debit 64,694✔ 2,588 X 27,412 x Credit 64,694 30,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

HANDOUT PROBLEM for CURRENT LIABILITIES I. Prepare journal entries for the following chronological transactions and a. You sold merchandise on account for $250,000 on account. The products cost $110,000. Your company uses a perpetual inventory system. Your sales included a two-year warranty on the product. You spent $1,400 to repair products in part "a." which were under warranty. On December 31, 2021, you estimated that there would be an additional $8,000 of b. с. repairs on products in part "a." You estimated that $5,000 of the repairs would оссur in 2022. In 2022, you performed $4,800 of repairs on products from part "a." and $1,920 of repairs on products sold in 2022. On December 31, 2022, you estimated that repairs on products sold in 2021 would be an additional $3,500 and for products sold in 2022 would be an additional $9,000. You believe that $5,400 of the $9,000 of repairs would occur d. е. in 2023. II. Based upon the transaction above, determine the amount of current…
On January 1, 2024, QuickStream Communications leased telephone equipment from Digium, Incorporated Digium's cash selling price for the equipment is $1,959,867. The lease agreement specifies six annual payments of $450,000 beginning December 31, 2024, and on each December 31 thereafter through 2029. The six-year lease is equal to the estimated useful life of the equipment. The contract specifies that lease payments for each year will increase by the higher of (a) the increase in the Consumer Price Index for the preceding year or (b) 2%. The CPI at the beginning of the lease is 120. Digium routinely leases equipment to other firms. The interest rate in these lease arrangements is 10%. 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 journal entries for QuickStream to record the lease at its beginning date of January 1, 2024 - - 1 Record the beginning of the lease for QuickStream…
18. Melanie Corp. borrowed $101,000 cash on September 1, 2019, and signed a one-year 6%, interest-bearing note payable. The interest and principal are both due on August 31, 2020. Assume that the appropriate adjusting entry was made on December 31, 2019 and that no adjusting entries have been made during 2020. Which of the following would be the required journal entry to pay the note on August 31, 2020? Multiple Choice Interest payable2,020 Notes payable101,000 Cash 103,020 Notes payable101,000 Interest expense6,060 Cash 107,060 Interest expense6,060 Cash 6,060 Interest expense4,040 Interest payable2,020 Notes payable101,000 Cash 107,060
Instructions General Journal Shaded cells have feedback. X Chart of Accounts Sax Company signs a lease agreement dated January 1, 2019, that provides for it to lease computers from Appleton Company beginning January 1, 2019. The lease terms, 4a. Prepare journal entries for Sax for the year 2019. CHART OF ACCOUNTS provisions, and related events are as follows: Sax Company 1. The lease term is 5 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year. The computers General Journal Instructions General Ledger are not specialized for Sax. 2. The computers have an estimated life of 5 years, a fair value of $300,000, and a zero estimated residual value. ASSETS REVENUE How does grading work? 3. Sax agrees to pay all executory costs directly to a third party. 111 Cash 411 Sales Revenue PAGE 2019 4. The lease contains no renewal or bargain purchase options. 121 Accounts Receivable 5. The annual payment is set by Appleton at $83,222.92 to earn a…
WITH SOLUTION-COMPUTATION 63. On July 1, 2019, an entity leased an equipment to a lessee under a 3-year operating lease. Total rent for the lease term is P3,600,000, payable P50,000 monthly for the first lease year, P75,000 monthly for the second lease year and P175,000 monthly for the third lease year. All payments were made when due. On June 30, 2021, what amount should be reported as accrued rent receivable?a. 2,100,000b. 1,200,000c. 900,000d. 0
O On January 1, 2024, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic. Portions of the Equipment Leasing’s lease amortization schedule appear below: January 1 Payments Effective Interest Decrease in Balance Outstanding Balance $ 314,048 2024 $ 24,000 $ 24,000 $ 290,048 2025 $ 24,000 $ 14,502 $ 9,498 $ 280,550 2026 $ 24,000 $ 14,028 $ 9,972 $ 270,578 2027 $ 24,000 $ 13,529 $ 10,471 $ 260,107 2028 $ 24,000 $ 13,005 $ 10,995 $ 249,112 2029 $ 24,000 $ 12,456 $ 11,544 $ 237,568 2030 $ 24,000 $ 11,878 $ 12,122 $ 225,446 — — — — — — — — — — — — — — — 2041 $ 24,000 $ 11,272 $ 12,728 $ 44,627 2042 $ 24,000 $ 2,231 $ 21,769 $ 22,858 2043 $ 24,000 $ 1,143 $ 22,857 $ 0 Required: What is Majestic’s lease liability at the beginning of the lease (after the first payment)? What…
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 April 1, 2021, Primer Corp. signs a five-year lease to use office space. The present value of the monthly lease payments Is $100,000. Record the lease. (If no entry Is requlred for a particular transaction/event, select "No Journal Entry Requlred" in the first account fleld.) View transaction list Journal entry worksheet 1 Record the lease. Note: Enter debits before credits. Date Account Title Debit Credit April 01, 2021 Record entry Clear entry View general journal
Help Save & Ex On September 30, 2024, Truckee Garbage leased equipment from a supplier and agreed to pay $140,000 annually for 15 years beginning September 30, 2025. Generally accepted accounting principles require that a liability be recorded for this lease agreement for the present value of scheduled payments. Accordingly, at inception of the lease, Truckee recorded a $1,405,261 lease liability. Required: Determine the interest rate implicit in the lease agreement. Note: Use tables, Excel, or a financial calculator. Round your answer to 1 decimal place. (FV of $1, PV of $1, EVA of $1, PVA of $1, EVAD of $1 and PVAD of $1) Interest rate implicit %
On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions.Lease term 4 YearsAnnual rental payment in advance on 1July each year $40,000Residual value at end of lease term $15,000Residual guaranteed by lessee nilInterest rate implicit in lease 8%The lease is cancellable only with the permission of the lessorThe expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term..Required1. Prepare the lease payments schedule for the True Ltd (show all workings).2. Prepare the journal entries in the books of True Ltd for the year ended 30 June 2020 and 30 June 2021.
Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2019 for $900. At December 31, 2019, the adjusting journal entry to record expiration of this asset will include a: o Debit to Insurance Expense and a credit to Prepaid Insurance for $900 o Debit to Prepaid Insurance and a credit to Insurance Expense for $100 o Debit to Insurance Expense and a credit to Prepaid Insurance for $75 o None of the above
Use the information pertaining to Laura Leasing Company and Plote Company from E21.15. Assume that the expected residual value at the end of the lease is $10,000, such that the payments are $24,638.87. Instructions Prepare all of the journal entries for the lessee for 2020 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. In E21.15 Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Plote Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $80,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is guaranteed. 4. The agreement requires equal annual…