GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Chapter S, Problem 3E
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Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2011.
Edison purchased the equipment from International Machines at a cost of $112,080.
Related Information:
2 years (8 quarterly periods)
$15,000 at the beginning of each period
2 years
$112,080
8%
Lease term
Quarterly rental payments
Economic life of asset
Fair value of asset
Implicit interest rate
(Also lessee's incremental borrowing rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the inception of the lease
through January 1, 2012. Edison's financial year ends December 31.
!
Required information
[The following information applies to the questions displayed below.]
On January 1 of this year, Google Corporation leased a package of high-speed servers by
signing a five-year finance lease. Lease payments of $300,000 are due at the end of each
year. Google uses the straight-line method to amortize leased assets and the effective
interest rate method to amortize lease liabilities. Assume that the appropriate annual
discount rate is 9 percent.
Prepare the journal entries to record the reduction of the lease asset and the lease liability on December 31,
Year 2.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first
account field. Round your answers to 2 decimal places.
1
No
Transaction
a.
× Answer is not complete.
General Journal
Debit
Credit
Lease liability
☑
300,000.00
Cash
300,000.00
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2011.
Edison purchased the equipment from International Machines at a cost of $112,080.
Related Information:
2 years (8 quarterly periods)
$15,000 at the beginning of each period
2 years
$112,080
Lease term
Quarterly rental payments
Economic life of asset
Fair value of asset
8%
Implicit interest rate
(Also lessee's incremental borrowing rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the inception off
the lease through January 1, 2012. Depreciation is recorded at the end of each financial year (December 31) on a
straight-line basis.
Chapter S Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. S - Defining a Lessor Which of the following best...Ch. S - Prob. 2MCQCh. S - Prob. 3MCQCh. S - Prob. 4MCQCh. S - Prob. 5MCQCh. S - Prob. 6MCQCh. S - Prob. 1MECh. S - Prob. 2MECh. S - Prob. 3MECh. S - Prob. 4ME
Ch. S - Prob. 1ECh. S - Prob. 2ECh. S - Prob. 3ECh. S - Prob. 4ECh. S - Calculating a Deferred Tax Liability LOS-5 On...Ch. S - Prob. 6ECh. S - Prob. 7ECh. S - Prob. 8ECh. S - Prob. 9ECh. S - Prob. 10ECh. S - Converting Operating Leases to Capital Leases...Ch. S - Converting Operating Leases to Capital Leases...Ch. S - Computing Effective Tax Rates LOS-4 Below is...Ch. S - Prob. 4PCh. S - Prob. 5PCh. S - Prob. 6PCh. S - Analyzing Starbuckss Lease Disclosures The...Ch. S - Analyzing Disneys Income Tax Disclosures The...
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- Uramilabenarrow_forwardManufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $112,080. Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2016, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter Economic life of asset 2 years Interest rate charged by the lessor 8% Required: Prepare a lease amortization schedule for the two-year term of the lease and appropriate entries for Manufacturers Southern from the beginning of the lease through December 31, 2016. The company’s fiscal year-end is December 31. Appropriate adjusting entries are recorded at the end of each quarter.arrow_forwardI want correct answerarrow_forward
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