Reference no: EM132758969
Question: 1) Kendra Corporation, in reviewing its allowance for doubtful accounts during 2020, has determined that 1% is the appropriate amount of bad debt expense to be recorded. The company had been using 1.5% as its rate in 2018 and 2019 when the expense had been $14,000 and $10,000, respectively. Kendra would have recorded $24,000 in bad debt expense for 2020 if they had used the old rate. Kendra Corporation has recorded bad debt expense in 2020 using the new estimates.
2) On January 1, 2017, Kendra Corp. purchased a machine for $ 495,000 and depreciated it using the straight-line method with an estimated useful life of eight years with no residual value. On January 1, 2020, Kendra determined that the machine had a useful life of only six years from the date of acquisition, but will have a residual value of $ 45,000. The depreciation for 2020 has not yet been recorded.
3) At December 31, 2020 Kendra had a total lease liability of $324,890. Kendra reported this amount on the financial statements as a non-current lease liability. Kendra did not present separately the current portion of $124,902.
Required: Prepare any above journal entries required as a result of the information in parts 1, 2 and 3. If no entry is required, state so, and explain why. Kendra reports under IFRS and has a 30% tax rate.
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