Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. to raise operating funds, national distribution ce

To raise operating funds, National Distribution Center sold its office building to an insurance company...

60.1K

Verified Solution

Question

Accounting

image

image

image

image

To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2021, for $900,000 and immediately leased the building back. The operating lease is for the final 10 years of the building's estimated 20- year remaining useful life. The building has a fair value of $900,000 and a book value of $700,000 (its original cost was $1 million). The rental payments of $200,000 are payable to the insurance company each December 31. The lease has an implicit rate of 8%. (FV of $1, PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. & 2. Prepare the appropriate entries for National Distribution Center on January 1, 2021 and December 31, 2021, to record the sale- leaseback and necessary adjustments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record sale of building. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 Journal entry worksheet

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