. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2020. Hi-Tech manufactured the equipment at a cost of $110,000.
Other information:
Lease term |
3 years |
Annual payments |
$50,000 on January 1 each year |
Life of asset |
3 years |
Implicit interest rate |
8% |
Incremental rate |
8% |
PV, annuity due, 3 periods, 8% |
2.7833 |
PV, ordinary annuity, 3 periods, 8% |
2.5771 |
There is no expected residual value.
Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts
Requirement:- Prepare appropriate journal entries for Hi-Tech Leasing for 2020 and 2021. Assume a December 31 year-end.
Solution:- Journal entries
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. Northwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2020. Hi-Tech manufactured the...
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