Record lessee company journal entries on january

Assignment Help Financial Accounting
Reference no: EM132717845

Recording Finance Leasejournal Entries- Purchase Option Lessee Company enters into a 6-year finance lease of non-specialized equipment with Lessor Company onjanuary 1, 2020. Lessee has agreed to pay $28,000 annually beginning immediately on January 1, 2020. The lease includes an option for the lessee to purchase the equipment at $3,000, which is $2,000 below the estimated fair value at lease end. Lessee Company is reasonably certain that it will exercise the purchase option. The economic life of the asset is 7 years. The lessee's incremental borrowing rate is 2% and the lessor's implicit rate is not readily determinable by the lessee.

Problem 1: Record Lessee Company's journal entries on (a) january 1, 2020, and (b) December 31, 2020, assuming that the lease is properly classified as a finance lease

Reference no: EM132717845

Questions Cloud

Describe some of the investment choices available : John and Joan Smith are a typical, middle-aged couple. Briefly explain some of the investment choices available to them.to them.
Which cost behavior useful to managers for making decisions : Which Cost behavior is useful to managers for making decisions regarding all of the except? predicting profits as sales and production volume change.
Create one-year advertising budget and plan : Create a one-year advertising budget and plan that incorporates the use of various advertising media and publicity.
Record appropriate journal entries for donation and the sale : To raise funds for Fuzzly Catcher she has donated 10 pieces. Record the appropriate journal entries for the donation and the sale of the art.
Record lessee company journal entries on january : Record Lessee Company's journal entries on january 1, 2020, and (b) December 31, 2020, assuming that the lease is properly classified as a finance lease
Discuss about aristotelian virtue : Discuss about Aristotelian virtue. What is it all about? What are the key points to this topic?
Promotion and pricing strategies : Create a one-year advertising budget and plan that incorporates the use of various advertising media and publicity.
Morality and about politics : Drawing on everything you've read, how should we think about morality in the modern world? To put it another way, is virtue, as Aristotle conceived it, possible
Find what way are the economic meanings in the investment : Find what way are the economic meanings in the investment project evaluation criteria not necessarily suited to the corporate financial objective?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the cash flow associated with the sale of the used

If the Manata Company is subject to a marginal tax rate of 35%, determine the cash flow associated with the sale of the used truck.

  Elucidate the difference in operating income for january

Elucidate the difference in operating income for January, February, and March under variable costing and absorption costing.

  Which of the statements is correct about aasb provisions

In accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets, which of the following statements is correct?

  What is the total for the company current assets

What is the total for the company current assets? A company has fixed assets of $509 million, total equity of $218 million, current liabilities of $128 million

  Determine what is diluted earnings per share

Net income for the year ended December 31, 2021, is $600,000. The income tax rate is 30%. What is 2021 diluted earnings per share?

  Determine the amount of loss from inventory shrinkage stated

Determine the amount of loss from inventory shrinkage stated (1) at cost and (2) at retail sales value. (Hint: Without any shrinkage losses, the cost of goods sold and the amount of gross profit would each amount to 50 percent of net sales.)

  Illustrate what three items comprise other reserves

Illustrate what three items comprise “Other reserves” as reported in the balance sheet? If British Airways used U.S. GAAP, what would be the likely account titles for the three items?

  Find what amount of unearned interest income is to be record

Sunlife Company used leases as a means of marketing products. What amount of Unearned interest income is to be recorded on the inception of the lease on January

  Companys margin of safety in units

A company that makes organic fertilizer has provided the following data : The company's margin of safety in UNITS is closest to ?

  Discuss the application of mfrs agriculture has raised

The application of MFRS141 Agriculture has raised several issues and concerns among the preparers of financial statements. Discuss

  Purposes of internal control-straight-line depreciation

What is the book value of the machine at the end of 2014 if the company uses straight-line depreciation? Which of the following is NOT one of the purposes of internal control? Which of the following should be included in the cost of land? What is the..

  Find the acid-test quick ratio

Cash is $475,000, Accounts Payable is $200,000, Accounts Receivable is $150,000, Wages Payable is $225,000, Bonds Payable is $700,000, Inventory is $750,000.

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