60.1K

Verified Solution

Link Copied!

Problem 15-5 (Algo) Lessee; operating lease; advance payment; leasehold improvement [LO15-4] On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $75,000 each, beginning December 31,2024 , and on each December 31 through 2026 . The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 7%. Winn also paid a $330,000 advance payment at the beginning of the lease. With permission of the owner. Winn made structural modifications to the building before occupying the space at a cost of $405,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. Note: Use tables, Excel, or a financial calculator. (EV of \$1, PV of \$1, EVA of $1, PVA of \$1, EVAD of $1 and PVAD of \$1) Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar. Journal entry worksheet rvote: encer aeoits berore credits. Journal entry worksheet 4 567 Record the advance payment made at the beginning of the lease by Winn. Note: Enter debits before credits. Journal entry worksheet 5667 Record the purchase of the leasehold improvements by Winn. Note: Enter debits before credits. Journal entry worksheet 1 56 Record the lease and interest payment for Winn. Note: Enter debits before credits. Journal entry worksheet

Answer & Explanation Solved by verified expert

See Answer