Prepare lease amortization schedule and appropriate entries

Assignment Help Financial Accounting
Reference no: EM132488953

Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $119,552. (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.)

Related Information:

  • Lease term2 years (8 quarterly periods)Quarterly rental payments$16,000 at the beginning of each period Economic life of asset years Fair value of asset$119,552 Implicit interest rate 8%(Also lessee's incremental borrowing rate)

Required:

Question 1: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization of the right-of-use asset is recorded at the end of each fiscal year (December 31) on a straight-line basis.

General Journal:

  1. Record the beginning of the lease for Manufacturers Southern 1/1/2021
  2. Record lease payment. (Jan 1, 2021)
  3. Record lease payment. (April 1, 2021)
  4. Record lease payment. (July 1, 2021)
  5. Record lease payment. (October 1, 2021)
  6. Record accrued interest. (December 31, 2021)
  7. Record amortization of the right-of-use asset forManufacturers Southern 12/31/2021
  8. Record lease payment (Jan 1 2022)

Reference no: EM132488953

Questions Cloud

Evaluate the cost of the ending inventory : What is the cost of its ending inventory? (Round the per unit cost to 2 decimal places and then round your answer to the nearest whole dollar.
Design an information system for fibre fashion : Design an information system for Fibre Fashion to assist with their business. You have discussed Porter's Value Chain in class and you should understand
Americans with disabilities act : Is an individual who is perceived as having a disability, but in fact has recovered from the disability or is not disabled, covered by the ADA
Prepare lease amortization schedule and appropriate entries : Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022
Describe the process of creating a unit plan : In 250-500 words, summarize and reflect on the process of creating a unit plan in English language arts. How does your unit plan help students successfully.
What is the annual depreciation for years : What is the annual depreciation for years 1, 3, and 6 for this asset, using the fixed depreciation percentages given by MACRS?(The percentages are 20.00%)
Determine mastery of identified standards : Your summative assessment should be designed to determine mastery of identified standards. Prior to completing the assessment, review the pre-assessment.
Employer workforce without violating the adea : Can an employer terminate older employees as a reduction in the employer's workforce without violating the ADEA (Age Discrimination in Employment Act)?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Net-present-value method to analyze investments

What are the major risk factors that you see in this project?  b. As the controller and a management accountant, what is your responsibility to this project?  c. What do you recommend the CEO do?

  What amount of loss should hart recognize

Hart did not elect the fair value option for reporting its financial liabilities. Hart amortizes discounts, premiums, and bond issue costs using the straight-line method. What amount of loss should Hart recognize on the redemption of these bonds?

  Eliminating alternative accounting treatments

In essay form, answer: If uniformity means eliminating alternative accounting treatments, then surely comparability of financial statements of different enterprises is improved. Do you agree with this statement?

  How much cash was collected from making sales

Beginning and ending accounts receivable are $76,000 and $42,000, respectively. Sales for the period total $384,000, of which $40,000 was directly for cash. How much cash was collected from making sales and collecting accounts receivable?

  Present value of tax savings related to operating losses

Calculate Present Value. Mary Martinez is ready to retire and has a choice of three pension plans. Plan A provides for an immediate cash payment of $350,000. Assume a tax rate of 35 percent and that current losses can be used to offset taxable income..

  Is stiner company materials price variance

Stiner Company has a materials price standard of $2.00 per pound. Five thousand pounds of materials were purchased at $2.20 per pound. The actual quantity of materials used was 5,000 pounds, although the standard quantity allowed for the output wa..

  Revenue from a contract with a customer

Revenue from a contract with a customer. A company must account for a contract modification as a new contract if. When multiple performance obligations exists in a contract, they should be accounted for as a single performance obligation when

  Pass both age and relationship tests for qualifying child

Which of the following persons don not pass both the age and relationship tests for a qualifying child

  Analyzing an oil lease as an option to drill for oil

ANALYZING AN OIL LEASE AS AN OPTION TO DRILL FOR OIL Suppose you own the option to extract 1,000 barrels of oil from public land over the next two years. You are deciding whether to extract the oil immediately, allowing you to sell the oil for $20 pe..

  Compute the amount of deferred gain or loss

Compute the amount of deferred gain or loss for 2015. Compute the amount of amortization of deferred pension gain or loss for 2015.

  Prepare a worksheet inserting january

Prepare a worksheet inserting January 1, 2017, balances, showing December 31, 2017 balances, and the journal entry recording postretirement benefit expense

  How are variances reported in income statements prepared

How are variances reported in income statements prepared for management? May standard costs be used in preparing financial statements for stockholders? Explain.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd