Question

Python Company leased equipment from Hope Leasing on January 1, 2018. Hope recently purchased the equipment...

Python Company leased equipment from Hope Leasing on January 1, 2018. Hope recently purchased the equipment at a cost of $271,910. Other information: Lease term 4 years Annual payments $77,000 on January 1 each year Life of asset 4 years Fair value of asset $271,910 Implicit interest rate 9% Incremental rate 9% There is no expected residual value. Required: Prepare appropriate journal entries for Python for 2018. Assume straight-line depreciation and a December 31 year-end. (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 amounts.)

Homework Answers

Answer #1
January 1, 2018 Leased asset 271910
      Lease payable 271910
January 1, 2018 Lease payable 77000
      Cash 77000
December 31, 2018 Interest expense 17542 =(271910-77000)*9%
      Interest payable 17542
December 31, 2018 Depreciation expense 67978 =271910/4
      Accumulated depreciation 67978
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment...
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $85,000. Other information: Lease term 4 years Annual payments $30,000 on January 1 each year Life of asset 4 years Fair value of asset $105,939 Implicit interest rate 9% Incremental rate 9% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a...
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment...
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $85,000. Other information: Lease term 4 years Annual payments $30,000 on January 1 each year Life of asset 4 years Fair value of asset $105,939 Implicit interest rate 9% Incremental rate 9% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a...
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment...
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $87,000. Other information: Lease term 4 years Annual payments $34,000 on January 1 each year Life of asset 4 years Fair value of asset $121,621 Implicit interest rate 8% Incremental rate 8% There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. (If no entry is required for a...
Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term...
Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term 4 years Annual payments $86,000 on January 1 each year Life of asset 4 years Implicit interest rate 9% PV, annuity due, 4 periods, 9% 3.5313 PV, ordinary annuity, 4 periods, 9% 3.2397 Hi-Tech's cost of the equipment $303,692 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018 and 2019. Assume a December 31 year-end. (If no...
Elf Leasing purchased a machine for $600,000 and leased it to IGA, Inc. on January 1,...
Elf Leasing purchased a machine for $600,000 and leased it to IGA, Inc. on January 1, 2018. Lease description: Quarterly rental payments $31,101 at beginning of each period Lease term 6 years (24 quarters) No residual value; no BPO Economic life of machine 6 years Implicit interest rate and lessee’s incremental borrowing rate 8% Fair value of asset $600,000 Required: Prepare appropriate entries for both IGA and Elf Leasing from the beginning of the lease through the second rental payment...
Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased the...
Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2018. Third Bank purchased the equipment at a cost of $1,050,000. Chance elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information: Lease term 1 year (4 quarterly periods) Quarterly lease payments $42,000 at Jan. 1, 2018, and at Mar. 31, June 30, and Sept. 30. Economic life of asset 5 years Interest rate charged by the lessor 6% Required: Prepare appropriate entries for Chance from...
On January 1, 2018, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period...
On January 1, 2018, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. Aqua expects the residual value at December 31, 2018, to be $70,000. Negotiations led to Maywood guaranteeing a $100,000 residual value. Equal payments under the lease are $140,000 and are due on December...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the...
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $125,370. (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   $16,500 at the beginning of each period   Economic life of asset   2 years   Fair value of asset...
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, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period...
On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $424,537 and has an expected economic life of five years. Aqua expects the residual value at December 31, 2024, to be $61,000. Negotiations led to Maywood guaranteeing a $86,500 residual value. Equal payments under the lease are $122,000 and are due on December...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT