What is the initial journal entry to set up the lease

Assignment Help Financial Accounting
Reference no: EM132840123

Questions -

Q1) Spider Compnay leases a fleet of cars to company B for 5 years. The annual lease payment due at the beginning of the year is 75000 and the rate implicit in the lease is 8%. Company B record the leases under IFRS 16. What is the initial journal entry to set up the lease on company B books?

Q2) On Jan 1, 2020 Hot Fuss Corp purchased a building for 900,000 with the intention of leasing it. The building is expected to have a 20 years life, no residual value, and will be appreciated on a straight line basis. On April 1 2020 under the cancellable lease hot Fuss leased the building to Sam's town company for $300,000 per year ($25,000 a month) for a four year period ending March 31, 2024. Sam's town paid $300,000 to hot fuss on April 1 2020. During the calendar 2020hot Fuss incurred $30,000 in maintenance and other executory costs under the provisions of the lease. This lease is properly classified as an operating lease by both parties.

A) How much income before income taxes will Hot Fuss corp. report from this lease for calendar 2020?

B) How much rent expenses will Sam's town report in connection with this lease for Calendar 2020?

Reference no: EM132840123

Questions Cloud

Describe the way to assess reading comprehension : One way to assess students after they have read something is to ask questions for comprehension. This is not the only way to assess reading comprehension.
What is the value of Walton the stock : Walton Inc.'s stock just paid a dividend of $5. If Walton has a required rate of return of 0.13, what is the value of Walton's the stock
Pittsburgh Synagogue Shooting : Discuss the recruitment and radicalization process of lone wolf terrorists in the domestic United States and abroad
How common had the automobile become in the town : How common had the automobile become in the 1920s in the town of Muncie, Indiana? What do you suppose accounts for this
What is the initial journal entry to set up the lease : Spider Compnay leases a fleet of cars to company B for 5 years. What is the initial journal entry to set up the lease on company B books
What was the impact of early european exploration : What was the impact of early European exploration and colonization on the Americas? Be sure to address both the positives and negatives of this time period.
Media is fourth pillar of democracy : Media is the fourth pillar of democracy. However, to be effective, media should be truthful and transparent.
Reflection of a miscommunication from a work situation : Using the lessons learned in class as well as reflections from the self-evaluation, offer an alternative solution
How your community addresses the core missions and goals : In the readings for this unit, we learned about the history of civil defense and the ways this has changed over time in our communities to include emergency.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Journalize the transactions in activity

Journalize the transactions in Activity 1. (Establish your own chart of accounts). The owner purchased a car in the name of the business for P900,000.

  Qreporting and computing the acquisition and amortization

qreporting and computing the acquisition and amortization of three different intangible assetskreiser company had three

  Find how would the initial measurement of lease liability

Sheffield to enter the lease of $1,000. How would the initial measurement of the lease liability and right-of-use asset be affected under this situation?

  What is the net present value of the investment opportunity

If you undertake the investment opportunity, what is the Nominal Payback Period? Using the factors for 6%, what is the Discounted Payback Period? What is the Net Present Value of this investment opportunity?

  Determine and calculate cash flow from financing activities

Determine and Calculate cash flow from financing activities. Create a cash flow table. Show that cash effects net to a $450 outflow.

  Compute the supplies expense in the income statement

Howard paid suppliers in full for its balance owed of $128,000. Compute the supplies expense in the 2021 income statement

  Write a response to these congress-people explaining

Write a response to these Congress-people explaining the importance of neutrality in financial accounting and reporting.

  Elmo clinic has identified three activities for daily matern

Elmo Clinic has identified three activities for daily maternity care: occupancy and feeding, nursing, and nursing supervision. The nursing supervisor oversees 150 nurses

  Determine stock investment transactions

Determine Stock Investment Transactions. Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method.

  Prepare the appropriate journal entry to record compensation

Prepare the appropriate journal entry(s) on December 31, 2022 and 2023 in response to the new estimate. Determine the total compensation cost pertaining

  How is ulta beauty organized and managed

How is Ulta Beauty organized and managed (by product groups, geographic region, function, etc.)? How does that affect accounting

  What is the present value of the new drug

What is the present value of the new drug if the interest rate is 10% per year? Sabika works for a pharmaceutical company that has developed a new drug.

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