Question

**Please keep in mind the journal has 7 entries required**

Federated Fabrications leased a tooling machine on January 1, 2018, for a three-year period ending December 31, 2020. The lease agreement specified annual payments of $33,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2019. The company had the option to purchase the machine expected to be $57,000 a sufficient difference that exercise seems reasonably certain. The machine's estimated useful life was six years with no salvage value. Federated was aware that the lessor's implicit rate of return was 10%. (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.) December 30, 2020, for $42,000 when its fair value was on Required: 1. Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease. 2. Prepare an amortization schedule that describes the pattern of interest expense for Federated over the lease term. 3. Prepare the appropriate entries for Federated from the beginning of the lease through the end of the lease term. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the amount Federated should record as a right-of-use asset and lease liability for this finance lease. (Round your intermediate and final answer to the nearest whole dollar amount.) Right-of-use asset and lease liability Required 2 Required 1 Journal entry worksheet 1 2 3 4 5 7 Record the lease Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018 Record entry Clear entry View general journal Required 3 Required 2 Journal entry worksheet > 1 2 3 4 5 6 7 8 Record the cash payment. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018 Record entry Clear entry View general journal LO Journal entry worksheet 2 3 4 5 6 7 8 Record the amortization of right-to-use asset for Federated. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2018 Clear entry View general journal Record entry LO Journal entry worksheet 2 3 4 6 7 8 Record lease payment Note: Enter debits before credits. General Journal Debit Date Credit December 31, 2018 Record entry Clear entry View general journal LO Journal entry worksheet 7 8 2 6 Record the amortization of right-to-use asset for Federated. Note: Enter debits before credits. General Journal Debit Date Credit December 31, 2019 Record entry Clear entry View general journal O Journal entry worksheet 2 3 4 5 7 Record lease payment. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2019 View general journal Record entry Clear entry CO C Journal entry worksheet

Answer 1

PAGE DATE: Liqauef Adet Ond dease Poymauts $ 23.000 Abanual Present Value DE@ 10h loate festals Dade 33000 33000 NaMe3018 O.826 33 000 3L Dec 2019 33000 88the &5040 feon lialality $25040

PAGE DATE Leginadld Liro Parti datienScladule Ductsbndi Lugeeutd fechie Deaacase in alasce Balacy Aate 8s040 33 000 saolo 33 000 200 33000 29160 3.)) pun 33000 OCtS 3040 33000-291bo 3 1 33000 33 D00 Total 99000 13960 99000

PAGE DATE Taumal entria:- Pocomwgs ολ. Αλλε- fease Ale 85040 To feas fialility &S04D Ale fiau tialility Ale 3300D Bamk Ae 33000 31 Deceber do1 a) inane Claeage teust) Ae r Sa.00 To Heaie tobility Ale &342 b) Pepeeciation Ae D To Addet hase Ale 28342

PAGE DATE 31 Dcamber 2019 a finana Charge Catoret)) fease ohligation Me Ds 33000 feau Obligation 33 000 To bank Alc 8347 Dypesiaisn Asdct ern 28343 31 December 20a0- a Finance Charge (krat) Ale Br 3o40 for Dligatien Ale Pho70 A feale Oldigation Ale Dr 33000 bauk Ale 33 000

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