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On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease...

On January 1, 2018, Winn Heat Transfer leased office space under a three year operating lease agreement. The arrangement specified three annual rent payments of $60,000 each, beginning December 31, 2018, and at each December 31 through 2020. The lessor, HVAC Leasing calculates lease payments based on an annual interest rate of 5%. Winn also paid a $276,000 advance payment at the beginning of the lease in addition to the first $60,000 rent payment. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $336,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. (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.)

1. 1/1/2018 Record the beginning of the lease for Winn.

2. 1/1/2018 Record the lease payment for Winn.

3. 12/31/2018 Record the lease and interest payment for Winn.

4. 12/31/2018 Record the amortization of right-to-use asset for Winn.

5. 12/31/2018 Record the depreciation expense for Winn.

6. 12/31/2019 Record the lease and interest payment for Winn.

7. 12/31/2019 Record the amortization of right-to-use asset for Winn.

8. 12/31/2019 Record the depreciation expense for Winn.

9. 12/31/2020 Record the lease and interest payment for Winn.

10. 12/31/2020 Record the amortization of right-to-use asset for Winn.

11. 12/31/2020 Record the depreciation expense for Winn.

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