To raise operating funds, Signal Aviation sold an airplane on January 1, 2024, to a finance company for $950,000. Signal immediately leased the plane back for a 12-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $980,000. . Its cost and its book value were $690,000. . Its useful life is estimated to be 14 years. The lease requires Signal to make payments of $126,750 to the finance company each January 1. Signal depreciates assets on a straight-line basis. The lease has an implicit rate of 10%. . . Required: 1. & 2. Prepare the appropriate entries for Signal on January 1, 2024 and December 31, 2024, to record the transaction and necessary adjustments. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

To raise operating funds, Signal Aviation sold an airplane on January 1, 2024, to a finance company for $950,000. Signal immediately leased the plane back for a 12-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $980,000. . Its cost and its book value were $690,000. . Its useful life is estimated to be 14 years. The lease requires Signal to make payments of $126,750 to the finance company each January 1. Signal depreciates assets on a straight-line basis. The lease has an implicit rate of 10%. . . Required: 1. & 2. Prepare the appropriate entries for Signal on January 1, 2024 and December 31, 2024, to record the transaction and necessary adjustments. Note: Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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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