On January 1,2022 , signed an eight-year lease agreement for equipment. Annual payments of $28,500...
90.2K
Verified Solution
Link Copied!
Question
Accounting
On January 1,2022 , signed an eight-year lease agreement for equipment. Annual payments of $28,500 are to be made at the beginning of each year. At the end of the lease, the equipment will revert to the lessor. The equipment has a useful life of eight years and has no residual value. At the time of the lease agreement, the equipment has a fair value of $166,000. An interest rate of 10.5% and straight-line depreciation are used. A. Use the abovementioned Information to solve Questions from 1-3. Q1: Identify the type of lease Q2: Lease amortization schedule Q3: Journal entries at: - January 1,2022 - December 31,2022 - January 1,2023 - December 31,2023 B. Highlights the differences in calculation treatment between operating Lease and financial lease and repeat the same accounting treatment (Journal Entry) under operating lease terms. - January 1,2022 - December 31,2022 - January 1,2023 - December 31,2023
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: Zin AI - Your personal assistant for all your inquiries!
On January 1,2022 , signed an eight-year lease agreement for equipment. Annual payments of $28,500 are to be made at the beginning of each year. At the end of the lease, the equipment will revert to the lessor. The equipment has a useful life of eight years and has no residual value. At the time of the lease agreement, the equipment has a fair value of $166,000. An interest rate of 10.5% and straight-line depreciation are used. A. Use the abovementioned Information to solve Questions from 1-3. Q1: Identify the type of lease Q2: Lease amortization schedule Q3: Journal entries at: - January 1,2022 - December 31,2022 - January 1,2023 - December 31,2023 B. Highlights the differences in calculation treatment between operating Lease and financial lease and repeat the same accounting treatment (Journal Entry) under operating lease terms. - January 1,2022 - December 31,2022 - January 1,2023 - December 31,2023 