Prepare the journal entries for the Lessee

Assignment Help Accounting Basics
Reference no: EM132726865

Question - Lessee enters into a five-year lease of office space on January 1, and concludes that the agreement is an operating lease. Lessee pays initial direct costs of $5,000. The agreement provides the following:

Lease term

Five years, with the first payment due at lease commencement and the remainder annually at the lease anniversary date thereafter

Annual payments, beginning at lease commencement and annually thereafter

Commencement - $25,000

Year 2 - $26,000

Year 3 - $27,000

Year 4 -- $28,000

Year 5 -- $29,000

Discount rate 4.0%

Present value (PV) of lease payments $124,645

Required - Show the impact on each year of Lessee's income statement and balance sheet. Prepare the journal entries for the Lessee at the commencement of the lease and at the end of year 1.

Reference no: EM132726865

Questions Cloud

Why is leadership outlook on security critical : Why is leadership outlook on security critical to employee buy-in at all levels? What are security issues with utilizing client-side plug-ins in web application
Find and determine the cost per unit for each group : Company ABC divides its inventory into three different groups. Determine the cost per unit for each group. Use the relative sales value method.
What account should the client classify the apartment : As an auditor, what account should the client classify the apartment and housing / real estate complex be? Explain the answer
Solve the estimated ending inventory using the gross profit : Calculate the estimated ending inventory using the gross profit method.Gross profit is 40% of sales. purchase discounts $5,250
Prepare the journal entries for the Lessee : Show the impact on each year of Lessee's income statement and balance sheet. Prepare the journal entries for the Lessee
About yourself and your personal journey : Tell us about yourself and your personal journey that has lead you to University of the Cumberlands.
What is increase in expected monthly product contribution : What is the increase in the expected monthly product contribution for each of the possible changes? Assume long-run production equals sales.
Devices to connect to the corporate network : You are to create a policy to serve as a governance document that allow employees to bring their own devices to connect to the corporate network
Risk management tools for food industry : An analysis of the key political, economic, social, technical, legislative and environmental risks that the organization is currently facing

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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