The following relate to an operating lease agreement:The lease term is 3 years, beginning January 1, 2021.The leased asset cost the lessor $950,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets.Annual lease payments at the beginning of each year were $138,500.Incremental costs of negotiating and consummating the completed lease transaction incurred by the lessor were $4,650. Required:Prepare the appropriate entries for the lessor from the beginning of the lease through the end of the lease term

Answered: The following relate to an operating…

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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The following relate to an operating lease agreement:

The lease term is 3 years, beginning January 1, 2021.
The leased asset cost the lessor $950,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets.
Annual lease payments at the beginning of each year were $138,500.
Incremental costs of negotiating and consummating the completed lease transaction incurred by the lessor were $4,650.

Required:
Prepare the appropriate entries for the lessor from the beginning of the lease through the end of the lease term

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Journal entries refers to the entries which are made at the end of the period through the companies and it records the events or the transactions of the business into the books of accounts.

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