Assume that on january 1 2012 kimberly-clark corp signs a

Assignment Help Accounting Basics

Reference no: EM13613690

Assume that on January 1, 2012, Kimberly-Clark Corp. signs a 10-year noncancelable lease agreement to lease a storage building from Trevino Storage Company. The following information pertains to this lease agreement. 1. The agreement requires equal rental payments of $90,000 beginning on January 1, 2012. 2. The fair value of the building on January 1, 2012 is $550,000. 3. The building has an estimated economic life of 12 years, with an unguaranteed residual value of $10,000. Kimberly-Clark depreciates similar buildings on the straight-line method. 4. The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor. 5. Kimberly-Clark's incremental borrowing rate is 12% per year. The lessor's implicit rate is not known by Kimberly-Clark. 6. The yearly rental payment includes $3,088 of executory costs related to taxes on the property. Instructions Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2012 and 2013. Kimberly-Clark's corporate year end is December 31.

Reference no: EM13613690

Questions Cloud

Other annual out-of-pocket expenses associated with running : tim is an accounting major at a midwestern state university located approximately 60 miles from a major city. many of

Blue service center just purchased an automobile hoist for : blue service center just purchased an automobile hoist for 35000. the hoist has an 8-year life and an estimated salvage

The just completed year hanna company had a net income of : the just completed year hanna company had a net income of 35000. balances in the companys current asset and current

How would this years total owners equity be affected by a : how would this years total owners equity be affected by a common stock not cash dividend that had been declared and

Assume that on january 1 2012 kimberly-clark corp signs a : assume that on january 1 2012 kimberly-clark corp. signs a 10-year noncancelable lease agreement to lease a storage

Presented below are two independent situations a on march 3 : presented below are two independent situations. a on march 3 van teese appliances sells 680000 of its receivables to

Calculate the approximate fixed cost component of tanners : tanner inc. has incurred the following overhead costs over a 6 week period week machine hours overhead cost 1 68 1190 2

Fuqua companys sales budget projects unit sales of part : fuqua companys sales budget projects unit sales of part 198z of 10900 units in january 12400 units in february and

Budget what is a final : what is a final

User Account

All Pages