User Account

All Pages

Prepare the journal entries on the books of krauss

Assignment Help Accounting Basics
Reference no: EM131798247

Question - Krauss Leasing Company signs a lease agreement on January 1, 2011, to lease electronic equipment to Stewart Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:

1. Stewart has the option to purchase the equipment for $16,000 upon termination of the lease.

2. The equipment has a cost and fair value of $240,000 to Krauss Leasing Company. The useful economic life is 2 years, with a salvage value of $16,000.

3. Stewart Company is required to pay $7,000 each year to the lessor for executory costs.

4. Krauss Leasing Company desires to earn a return of 10% on its investment.

5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.

QUESTION:

(a) Prepare the journal entries on the books of Krauss Leasing to reflect the payments received under the lease and to recognize income for the years 2011 and 2012.

(b) Assuming that Stewart Company exercises its option to purchase the equipment on December 31, 2012, prepare the journal entry to reflect the sale on Krauss's books.

Reference no: EM131798247

Questions Cloud

Prepare financials on a quarterly basis : Assume that Baccio prepares their financials on a quarterly basis. How much revenue will they report on their income statement
Evaluate the user-technology interface : Using the content in the textbook and other readings, list three elements that will be used to evaluate the user-technology interface.
Compute the laspeyres price index : a. Compute the Laspeyres price index, using 2009 as the base year. b. Compute the Paasche price index, using 2009 as the base year.
Explain strategies for demonstrating the need : Identify a new piece of equipment you would like to see purchased by the organization. Consider how knowledge of capital budgeting could influence your approach
Prepare the journal entries on the books of krauss : Prepare the journal entries on the books of Krauss Leasing to reflect the payments received under the lease and to recognize income for the years 2011 and 2012
Demands were found after studying the last six months sales : Produce Company needs to know the pounds of bananas to have on hand each day
Do business ethics classes have value in the workplace : Can ethics be taught? Do business ethics classes have value in the workplace?
What income will gerald report : Butter had net taxable income of $80,000 and made a $15,000 distribution to Gerald. What income will Gerald report from Bread and Butter's activities
What are the three topics that will be discuss in the essay : What are the three topics that will be discussed in this essay? Does the topic sentence of each paragraph coordinate with the thesis statement.

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the divisions margin

Ceder Products is a division of a major corporation. Last year the division had total sales of $21,520,000 net operating income of $538,000 and average operating of $8,000,000. The company's minimum required rate of return is 18% a) What is the di..

  What dilemma does the sales representative face

What dilemma does the sales representative face - who are the potential stakeholders and how might they be affected by the decision of the sales representative?

  Discuss the opportunity to increase annual revenues

Lyman company has the opportunity to increase annual revenues $100,000 by selling to a new, riskier group of customers

  Accounting records problem

Justings Co. owned 80% of Evana Corp. During 2006, Justings sold to Evana land with a book value of $48,000. The selling price was $70,000. In its accounting records, Justings should:

  Encounter in analyzing foreign financial statements?

encounter in analyzing foreign financial statements?

  What percentage change in this bond price will result

Now suppose the market interest rate on comparable bonds falls to 14 percent. What percentage change in this bond's price will result

  Have the roses acted ethically in alleging

Have the Roses acted ethically in alleging that the demand note should not be enforced against them because they had not read the note?

  Prepare a statement of comprehensive income

Prepare a statement of comprehensive income, using the two-income statement format. Ignore income taxes and earnings per share.

  Differences between us gaap and ifrs reporting

Differences between U.S. GAAP and IFRS reporting for the testing of asset impairment and the requirement to write down the asset value. Indicate whether or not you support the U.S. GAAP or IFRS approach. Provide support for your position.

  William farmer has just harvested his wheat crop he put the

william farmer has just harvested his wheat crop. he put the grain in a local elevator and was given a warehouse

  Information about clearwater company direct materials

Information about Clearwater Company's direct materials cost follows: Standard price per materials gram $ 100.00 Actual quantity used 9,200 grams Standard quantity allowed for production 9,400 grams Price variance $ 77,740 F Required:

  Proceeds from the issue of debt securities having stock

proceeds from an issue of debt securities having stock warrants should not be allocated between debt and equity

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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