Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ch 15 exercise 2 finance/sale lease journal entry

Ch 15 Exercise 2 Finance/sale Lease Journal entry On January 1, 2019, Comet International (Lessor)...

60.1K

Verified Solution

Question

Accounting

Ch 15 Exercise 2 Finance/sale Lease Journal entry On January 1, 2019, Comet International (Lessor) leased equipment to Ajax Limited (Lessee) which Comet purchased for this purpose. The equipment has an estimated useful life of 8 years with no salvage value. The lease term is 5 years with five annual payments $21,978 due at the beginning of 2019 and at each December 31 from 2019 to 2022. The implicit interest rate of the lease is 6%, which is also Ajaxs cost of capital. At the end of the lease period on December 31, 2023, Ajax can exercise a bargain purchase option for $25,000. Required: 1) Using the schedule of lease payments calculated for Ch 15 Exercise-1 to prepare all journal entries for the lessor from the beginning to the end of the lease. How much is total lease revenue? 2) Using the schedule of lease payments calculated for Ch 15 Exercise-1 to prepare all journal entries for the lessee from the beginning to the end of the lease. How much is total expense including lease expense and amortization expense? 3) Sales lease with selling profit: Write the journal entry for the lessor assuming the cost of the equipment is $100,000 (so there is a selling profit).

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

a Select one Which function has a period of De O f x tan 8x...

Mechanical Engineering
1.2K views

saturated humid air at 1 atmosphere and 10 degrees Celsius is to be mixed with atmospheric...

Biology
1.2K views

Based on your understanding of the "Purple Earth Hypothesis", which of the following statements is...

Accounting
1.2K views

The bank portion of last month's bank reconciliation for Wildhorse Limited at October...

Accounting
1.2K views

A manufacturer reports the following information: Compute the (a) total product cost...

Accounting
1.2K views

Lite Travel Company's accounting records include the following information: Payments to suppliers $...

Accounting
1.2K views

Cost of direct material used in manufacturing $ 62,000 Direct labour costs 15,000 Manufacturing overhead...

Accounting
1.2K views

Oldham Inc. conducts business in State M and State N, which both use...

Accounting
1.2K views

Lee.com accepted a $70,000,634%,120-day note on July 26. Lee discounts the note on October 28...

Accounting
1.2K views

(1 point) Under which inventory cost method, the most recent cost of purchases remain in...

Accounting
1.2K views

Argon Corp. had capacity to produce 30,000 units of L3 using 60,000 kg of direct...

Finance
1.2K views

required rate of return is 10% Revisit MC 1 Question 3 A given project...