Recording Operating Lease-LessorGomez Inc. leases a vehicle from CareMax Inc. on January 1 for a three-year period. Gomez agrees to make $9,600 annual payments beginning on January 1. Prepare the journal entries during the year forCareMax Inc. assuming that the fair value of the vehicle is $44,800 and it has a useful life of 6 years with no salvage value (depreciated using the straight-line method). CarMax Inc. appropriately classifies the leaseas an operating lease.Note: Round your answers to the nearest whole dollar.Account NameDateJan, 1Dec. 31Dec. 31CheckTo record receipt of lease paymentTo record lease revenue+#To record depreciation→=→#Dr.000000Cr.000000

An operating lease is an agreement between two parties where the owner of the asset (lessor) gives…

Recording Operating Lease-Lessor Gomez Inc. leases a vehicle from CareMax Inc. on Janu CareMax Inc. assuming that the fair value of the vehic as an operating lease. Note: Round your answers to the nearest whole dollam Account Name Date Jan. 1 Dec. 31 Dec. 31 Check To record receipt of lease payment To record lease revenue + = To record depreciation 수 # # # Dr. C C C C C C

Recording Operating Lease-Lessor Gomez Inc. leases a vehicle from CareMax Inc. on Janu CareMax Inc. assuming that the fair value of the vehic as an operating lease. Note: Round your answers to the nearest whole dollam Account Name Date Jan. 1 Dec. 31 Dec. 31 Check To record receipt of lease payment To record lease revenue + = To record depreciation 수 # # # Dr. C C C C C C

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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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…
Exhibit Leased assets have an expected life of 5 years Depreciation is straight line Annual lease payment is $1,400 Interest rate is 12% 3) Find the total expense in Year 1 if exhibit refers to an Operating Lease 4) Find the total expensee in Year 1 if exhibit refers to a Capital Lease
Recording Lease ObligationsE17B. Business Application ▶ Soong Corporation has leased a piece of equipmentthat has a useful life of 12 years. This capital lease requires payments of $43,000 per yearfor 12 years. Soong currently is able to borrow money at a long-term interest rate of8 percent. (Round to the nearest dollar.)1. Calculate the present value of the lease.2. Prepare the journal entry to record the lease agreement.3. Prepare the journal entry to record depreciation of the equipment for the first yearusing the straight-line method.4. Prepare the journal entries to record the lease payments for the first two years.
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