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Problem 1 Hood lease equipment from Ford on January 1, 2019. Ford purchased the equipment from a...

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Accounting

Problem 1

Hood lease equipment from Ford on January 1, 2019. Fordpurchased the equipment from a manufacturer at a cost of$250,000,its fair value. Terms of the lease are as follows:

Lease term 2 years, (8 quarterly periods)

Quarterly payments, $15,000 beginning Jan 1, 2019

Economic life of asset, 5 years

Interest rate charged by lessor,10%

Required:

Prepare appropriate journal entriesfor the lessee through December 31, 2019. Appropriate adjustingentries are recorded at the end of the fiscal year.

Answer & Explanation Solved by verified expert
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Journal Entries in the books of Hood Lease Equipment Date Account Tittle Explanation Debit Credit 1Jan19 Right of use asset 110241 Lease Payable 110241 record    See Answer
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