Question

1. Record the beginning of the lease for Winn.

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 $102,000 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 5%. Winn also paid a $213,000 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 $315,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. (FV 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.)

2.Record the advance payment made at the beginning of the lease by Winn.

3.Record the lease payment for Winn.

4. Record the amortization the right-of-use asset for Winn.

5.Recored depreciation for Winn.

6.Recored the lease payment for Winn.

7. Record the amortization of the right-of-use asset for Winn.

8.Recored deprecation for Winn.

9.Recored the lease payment for Winn.

10.Recored the amortization of the right-of-use asset for Winn.

11. Recored depreciation for Winn.

Answer 1

Answer Page NO O Appoopriate entries On Jan 1,2021, Right of use asset #513000 + (109000 x '-(+373) = $313000 + (103000 x 2.72325) Credit Jan ! $490772 Jan ! $213000 213000 + 277,772 $ 490,772 Date Particular Debit Right of use asset $490772 2021 To lease payable ( Being lease payment) Prepaid rent $213000 2001 To cash ( Being advance lease payment) dec 31, Interest expense [C490719 – 213000)xs%] $13,889 ( lease payable $88,111 To cash (Being lease payment) lease payable (013000/3) $71000 To prepaid rent (Being advance lease payment). I dec 31, Amortization expense (102000 + 71000 --- $159,1|| To right of use asset (Being amortization expense 202) $ 102000 Ideal 2021 $ 71000 13889 2021 $159,111

Page No@ 2021 5% 2032 2022 12023 To accumulated depreciation - Leasehold improvement Depreciation expense (31500) dec 31, $105,000 To accumulated depreciation - Leasehold improveme $105,000 (Being depreciation expense Taterest expense (490772- 2-213000 – 8811)* $9483 dec 31, lease payable $92517 | anna To cash $102000 (Being second lease pay able) Idecal, lease payable (313009) $ 71000 To prepaid rent $ 71000 (Being advance lease payable) dec 31, Amortization expense (to.co0 +1 +71000 -9423 ) $ 163,517 To right of use asset $163,517 ( Being amortization experve dec 31, Depreciation expense (315000 $105000 To accumulate depreciation - Leasehold improve $105000 C Buing depreciation expense) Interest expens( 490 710 – 213000 -88141 $ 4857 - 92514)*54 To cash , $102000 (Being third lease pay ment dec 31, lease payable (213000) $ 71000 To prepaid rent $71000 (Being advance lease pay able) dec 31, Amortization expense (102000 + 41000 $168143 2023 To right of use asset ( Being amortization expense) Bepreciation expense (315000) Idec 31 $105,000 $ 105,000 (Being depreciation expense 2022 -maat Idec 31, lease payable 2003 $97143 2023 485 $168143