Question

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.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2018, Robertson Construction leased several items of equipment under a two-year operating lease...
On January 1, 2018, Robertson Construction leased several items of equipment under a two-year operating lease agreement from Jamison Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $40,000 each, payable semiannually on June 30 and December 31 each year. The equipment was acquired by Jamison Leasing at a cost of $360,000 and was expected to have a useful life of five years with no residual...
Operating lease; scheduled rent increases On January 1, 2016, Sweetwater Furniture Company leased office space under...
Operating lease; scheduled rent increases On January 1, 2016, Sweetwater Furniture Company leased office space under a 21-year operating lease agreement. The contract calls for annual rent payments on December 31 of each year. The payments are $10,000 the first year and increase by $500 per year. Benefits expected from using the office space are expected to remain constant over the lease term. Required: Record Sweetwater’s rent payment at December 31, 2020 (the fifth rent payment) and December 31, 2030...
On January 1, 2018, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease....
On January 1, 2018, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic. Portions of the Equipment Leasing’s lease amortization schedule appear below: Jan. 1 Payments Effective Interest Decrease in Balance Outstanding Balance 246,579 2018 22,500 0 22,500 224,079 2018 22,500 16,806 5,694 218,385 2019 22,500 16,379 6,121 212,264 2020 22,500...
21. On January 1, 2018, Queen Corporation leased equipment to King Company. The lease term is...
21. On January 1, 2018, Queen Corporation leased equipment to King Company. The lease term is six years. The first payment of $800,000 was made on January 1, 2018. The equipment cost Queen Corporation $3,600,000. The present value of the lease payments is $3,994,168. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 8%, how much interest revenue will Queen record in 2019 on this lease? a. 211,976 b. 255,533 c. 281,096...
Federated Fabrications leased a tooling machine on January 1, 2018, for a three-year period ending December...
Federated Fabrications leased a tooling machine on January 1, 2018, for a three-year period ending December 31, 2020. The lease agreement specified annual payments of $36,000 beginning with the first payment at the beginning of the lease, and each December 31 through 2019. The company had the option to purchase the machine on December 30, 2020, for $45,000 when its fair value was expected to be $60,000, a sufficient difference that exercise seems reasonably certain. The Machine's estimated useful life...
On January 1, 2018, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease....
On January 1, 2018, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic. Portions of the Equipment Leasing’s lease amortization schedule appear below: Jan. 1 Payments Effective Interest Decrease in Balance Outstanding Balance 210,711 2018 22,500 22,500 188,211 2018 22,500 18,821 3,679 184,532 2019 22,500 18,453 4,047 180,485 2020 22,500 18,049...
On January 1, 2018, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending...
On January 1, 2018, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2018, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $824,368 and has an expected economic life of five years. Nevels expects the residual value at December 31, 2018, will be $100,000. Negotiations led to the lessee guaranteeing a $140,000 residual value. Equal payments under the lease are $200,000 and are due on December...
On January 1, 2021, Sweetwater Furniture Company leased office space under a 21-year operating lease agreement....
On January 1, 2021, Sweetwater Furniture Company leased office space under a 21-year operating lease agreement. The contract calls for annual lease payments on December 31 of each year. The payments are $14,500 the first year and increase by $300 per year. Benefits expected from using the office space are expected to remain constant over the lease term. Required: Record Sweetwater's lease payment at December 31, 2025 (the fifth lease payment), and December 31, 2035 (the fifteenth lease payment). (If...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $112,446. (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.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $15,300 at the beginning of each period Economic life of asset 2 years Fair value of asset...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a five-year...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a five-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $14,000 due on December 31 of each year, calculated by the lessor using a 5% interest rate. The agreement is considered an operating lease. (FV of $1, PV of $1,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT