Question

On January 1, 2021, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $72,000 each, beginning December 31, 2021, and at each December 31 through 2023. The lessor HVAC Leasing calculates lease payments based on an annual interest rate of 8%. Winn also paid a $156,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $228,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. (EV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2023. Winn's fiscal year is the calendar year. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your answers to nearest whole dollars.) View transaction list Journal entry worksheet < 1 0 6 7 8 ..... 11 > Record the beginning of the lease for Winn Date General Journal January 01, 2021 rogh of use Doble Credit

Answer 1

Credit Answers Present valore -p1-(1+r)" | (+1,n3 years, y:897) Takoost) = 2.5771 2.5771 Journal entries :- Date particulars bebit 2021 Right of use Asset Ale or $341,551 Jan- [$156,000+($72,000]* 2.5771)] 341,551 To Lease payable Being lease payment] Dy $156,000 |ρτερα χρη/ AA $156,000 Tocash Being Advance lease payment] Dec31 Inlevest expense Ale or $14844 (6341,551-4456000) 87] Lease payable at Dr $57,156 1. To cash $72,000 Beingist Lease payment] lease payable Ak ff 156,000/3years] D$52,000 1. To prepaid sent $52,000 Being Advance lease payment? Amortization capenses Ale Dr $109, 156 $72,000+$ 52,000-$14,844] - To Right of use Asset $109,156 Being Amortization expenses] Depreciation expense Ale or $76.000 To Accumulated Depreciation - Leasehold improvement $76,000 {$228,000/years] |Being Depreciation expenses] Interest expenses AK DY $10,272 [341,551-$156.000-$57,156]x8% Lease payable ale 1. To cash $72,000 Being secound lease payable] 20221 Dec-21 or $61,728

Dec 31 $ 52,000 $113,728 76,000 Lease payable Ale (156000/7) or $52,000 . To prepaid Rent Being Advance leare payable] Amortization expense Ale. Dr $113,728 {$72,000 +$52000-$10,272] To Righ of use Asset Being Amortization expense] Depreciation expenses Ale or $76.000 [$228,000/=) TO Accumulated Depreciation Being Depreciation expenses] Interest expenses Ac or $5333 [$341,551-$156,000-$57.156-461.728187 lease payable Ale or $66.667 1. To cash Being god Lease payable] Lease payable ak (4156.000y3] or $58,000 To prepaid seut Being advance lease payable] | Amortization expenses Ale or $118,667 [72.000 +$52,000-$53337. . To Right of use Asset Being A mostization expenses] 10231 cec-3; $ 72,000 $52,000 $ 118,667