Problem 11-5 On January 1,2020, Madelle Company entered into a lease for floor space with the following information. Floor space 5,000 square meters Annual rental payable at the end of each year 200,000 Lease term 5 years Implicit in the elase 10% Present value of an ordinary annuity of 1 for 10% at 5 periods 3.7908 On Jnaury 1, 2022, Madelle Company and the lessor agreed to amend the original terms of the lease with the following information. Floor space 3,750 square meters Annual rental payable at the end of each year 150,000 Implicit in the elase 8% Present value of an ordinary annuity of 1 for 8% at 3 periods 2.5771 Required: Prepare the amorization schedule for 2020 and 2021. Prepare the journal entries for 2020. Compute the termination gain or loss on January 1,2022. Remeasure the lease liability on Jnaury 1, 2022. Prepare the amortization schedule for 2022,2023, and 2024. Prepare the journal entries for 2022.
Problem 11-5
On January 1,2020, Madelle Company entered into a lease for floor space with the following information.
Floor space 5,000 square meters
Annual rental payable at the end of each year 200,000
Lease term 5 years
Implicit in the elase 10%
Present value of an ordinary annuity of
1 for 10% at 5 periods 3.7908
On Jnaury 1, 2022, Madelle Company and the lessor agreed to amend the original terms of the lease with the following information.
Floor space 3,750 square meters
Annual rental payable at the end of each year 150,000
Implicit in the elase 8%
Present value of an ordinary annuity of
1 for 8% at 3 periods 2.5771
Required:
- Prepare the amorization schedule for 2020 and 2021.
- Prepare the
journal entries for 2020. - Compute the termination gain or loss on January 1,2022.
- Remeasure the lease liability on Jnaury 1, 2022.
- Prepare the amortization schedule for 2022,2023, and 2024.
- Prepare the journal entries for 2022.
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