1. | The lessee makes a lease payment of $73,600 to the lessor for equipment in an operating lease transaction. | |
2. | Sandhill Company leases equipment from Noble Construction, Inc. The present value of the lease payments is $644,000. The lease qualifies as a capital lease. |
Prepare the journal entries that the lessee should make to record
the above transactions. (Credit account titles are
automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the
amounts.)
No. |
Account Titles and Explanation |
Debit |
Credit |
---|---|---|---|
1. |
enter an account title to record rent payment |
enter a debit amount |
enter a credit amount |
enter an account title to record rent payment |
enter a debit amount |
enter a credit amount |
|
(To record rent payment.) | |||
2. |
enter an account title to record lease asset and liability |
enter a debit amount |
enter a credit amount |
enter an account title to record lease asset and liability |
enter a debit amount |
enter a credit amount |
|
(To record lease asset and liability.) |
Answer | |||
Account Titles and Explanation | Debit | Credit | |
1 | Rent of Lease | $ 73,600 | |
Cash | $ 73,600 | ||
(To record Rent payment ) | |||
2 | Building | $ 644,000 | |
Lease Liability | $ 640,000 | ||
(To record lease asset and liability.) | |||
1. The lessee makes a lease payment of $73,600 to the lessor for equipment in an...
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lease equipment to Kingbird Company. The following information
relates to this agreement.
1.
The term of the
non-cancelable lease is 3 years with no renewal option. The
equipment has an estimated economic life of 5 years.
2.
The fair value of the asset
at January 1, 2017, is $62,000.
3.
The asset will revert to the
lessor at the end of the lease term, at which time the asset...
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Corporation on January 1, 2020. The following information relates
to the lease agreement.
1.
The term of the lease is 7 years with no renewal option, and
the machinery has an estimated economic life of 9 years.
2.
The cost of the machinery is $525,000, and the fair value of
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3.
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Part 1) Amortization schedule
Part 2) Prepare all of the journal entries for the lessee for
2017 and 2018 to record the lease agreement, the lease payments,
and all expenses related to this lease. Assume the lessee’s annual
accounting period ends on December 31 and reversing entries are
used when appropriate. All executory costs are paid as incurred.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry"...
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Larkspur Leasing Company signs an agreement on January 1, 2017,
to lease equipment to Cole Company. The following information
relates to this agreement.
1.
The term of the non-cancelable lease is 6 years with no renewal
option. The equipment has an estimated economic life of 6
years.
2.
The cost of the asset to the lessor is $230,000. The fair value
of the asset at January 1, 2017, is $230,000.
3.
The asset will revert to the lessor at the...
Cullumber Leasing Company agrees to lease equipment to Riverbed Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $523,000, and the fair value of the asset on January 1, 2020, is $758,000. 3. At the end of the lease term, the asset reverts to the...
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