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Q2. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1. 2020. Hi-Tech manufactured the equipment at a cost of $90,000. Other information: Lease term Annual payments Life of asset Implicit interest rate Incremental rate PV, annuity due, 3 periods, 8% PV, ordinary annuity, 3 periods, 8% 2.5771 В усars $40,000 on January 1 each year 3 years 8% 8% 2.7833 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts.

Q2. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1. 2020. Hi-Tech manufactured the equipment at a cost of $90,000. Other information: Lease term Annual payments Life of asset Implicit interest rate Incremental rate PV, annuity due, 3 periods, 8% PV, ordinary annuity, 3 periods, 8% 2.5771 В усars $40,000 on January 1 each year 3 years 8% 8% 2.7833 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts.

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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Q2. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1. 2020. Hi-Tech manufactured the equipment at a cost of $90,000. Other information: Lease term Annual payments Life of asset Implicit interest rate Incremental rate PV, annuity due, 3 periods, 8% PV, ordinary annuity, 3 periods, 8% 2.5771 3 years $40,000 on January 1 each year 3 years 8% 8% 2.7833 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts.
Transcribed Image Text:Q2. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1. 2020. Hi-Tech manufactured the equipment at a cost of $90,000. Other information: Lease term Annual payments Life of asset Implicit interest rate Incremental rate PV, annuity due, 3 periods, 8% PV, ordinary annuity, 3 periods, 8% 2.5771 3 years $40,000 on January 1 each year 3 years 8% 8% 2.7833 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts.
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