50.1K

Verified Solution

Link Copied!

Prepare all necessary journal entries for Marin for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit (To record the lease) (To record first lease payment) (To record amortization of the right-of-use asset) (To record interest expense) Click if you would like to Show Work for this question: Open Show Work Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Windsor Company. The following information relates to this agreement. 1. 2. 3. 4. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. The fair value of the asset at January 1, 2020, is $63,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $5,000, none of which is guaranteed. The agreement requires equal annual rental payments of $20,289 to the lessor, beginning on January 1, 2020. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. Windsor uses the straight-line depreciation method for all equipment. 5. 6. Click here to view factor tables. (For calculation purposes, use decimal places as displayed in the factor table provided.) (a) Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to O decimal places, e.g. 5,265.) WINDSOR COMPANY (Lessee) Lease Amortization Schedule Annual Lease Interest on Reduction of Lease Date Payment Llability Liability Lease Liability 1/1/20 1/1/20 1/1/21 1/1/22 Click if you would like to Show Work for this question: Open Show Work Prepare all necessary journal entries for Marin for this lease through December 31, 2020. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit (To record the lease) (To record first lease payment) (To record amortization of the right-of-use asset) (To record interest expense) Click if you would like to Show Work for this question: Open Show Work Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Windsor Company. The following information relates to this agreement. 1. 2. 3. 4. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. The fair value of the asset at January 1, 2020, is $63,000. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $5,000, none of which is guaranteed. The agreement requires equal annual rental payments of $20,289 to the lessor, beginning on January 1, 2020. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. Windsor uses the straight-line depreciation method for all equipment. 5. 6. Click here to view factor tables. (For calculation purposes, use decimal places as displayed in the factor table provided.) (a) Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to O decimal places, e.g. 5,265.) WINDSOR COMPANY (Lessee) Lease Amortization Schedule Annual Lease Interest on Reduction of Lease Date Payment Llability Liability Lease Liability 1/1/20 1/1/20 1/1/21 1/1/22 Click if you would like to Show Work for this question: Open Show Work

Answer & Explanation Solved by verified expert

See Answer