On January 1, 2017, Concord Co. leased a building to Marigold Inc. The relevant information related to the lease is as follows.
Part - (a):
1.
To record entry for purchase of building in cash is:
2.
To record entry for receipt of payment against lease is:
3.
To record entry for depreciation on building is:
Working Note:
Computation of depreciation expense is:
Depreciation expense = Cost of building / Economic life of building
= $4,380,000 / 50
= $87,600
Hence, the depreciation expense is $87,600.
4.
To record entry for expenses of insurance and property is:
Working Note:
Computation the total value of cash paid is:
Total value of cash paid = Property tax expense + Insurance expense
= $89,500 + $10,700
= $100,200
Hence, the total value of cash paid is $100,200.
Part - (b):
To record entry for expense on rent is:
Part - (c):
Computation the amount of expense is:
Amount of expense = Fees paid for lease / Life of lease
= $28,700 / 10 years
= $2,870
Hence, the amount of expense is $2,870.
On January 1, 2017, Concord Co. leased a building to Marigold Inc. The relevant information related...
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