Question

Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2021. Chance elected the short-term...

Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2021. Chance elected the short-term lease option. Appropriate adjusting entries are made annually.

Related Information:
Lease term 1 year (12 monthly periods)
Monthly lease payments $52,000 at Jan. 1, 2021, through Dec. 1, 2021.
Economic life of asset 5 years
Interest rate charged by the lessor 6%


Required:
Prepare appropriate entries for Chance from the beginning of the lease through April 1, 2021

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Answer

Date

 Account Titles Debit Credit
01-Jan No journal entry required
01-Apr Lease expense $52,000
     Cash $52,000
( To record the lease payment )
01-May Lease expense $52,000
     Cash $52,000
( To record the lease payment )
01-Jun Lease expense $52,000
     Cash $52,000
(To record the lease payment )
01-Jul Lease expense $52,000
     Cash $52,000
(To record the lease payment )
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
Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2021. Natick has the option...
Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2021. Natick has the option to renew the lease at the end of two years for an additional three years. Natick is subject to a $55,000 penalty after two years if it fails to renew the lease. Framingham Leasing purchased the equipment from Waltham Machines at a cost of $346,294. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)...
Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2021. Natick has the option...
Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2021. Natick has the option to renew the lease at the end of two years for an additional three years. Natick is subject to a $40,000 penalty after two years if it fails to renew the lease. Framingham Leasing purchased the equipment from Waltham Machines at a cost of $416,962. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)...
atick Industries leased high-tech instruments from Framingham Leasing on January 1, 2021. Natick has the option...
atick Industries leased high-tech instruments from Framingham Leasing on January 1, 2021. Natick has the option to renew the lease at the end of two years for an additional three years. Natick is subject to a $40,000 penalty after two years if it fails to renew the lease. Framingham Leasing purchased the equipment from Waltham Machines at a cost of $153,238. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)...
Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the...
Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the equipment from Wong Machines at a cost of $250,000, its fair 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.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2018, and at Mar. 31, June 30, Sept. 30, and...
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...
On January 1, 2021, Rick’s Pawn Shop leased a truck from Corey Motors for a five-year...
On January 1, 2021, Rick’s Pawn Shop leased a truck from Corey 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 $20,000 due on December 31 of each year, calculated by the lessor using a 7% interest rate. The agreement is considered an operating lease. (FV of $1, PV of $1,...
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured...
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $86,000. Manufacturers Southern's fiscal year ends December 31. (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 $15,000 at the beginning of each period Economic life of asset 2...
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 International Machines on January 1, 2021. International Machines manufactured...
Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $90,000. Manufacturers Southern's fiscal year ends December 31. (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 $15,500 at the beginning of each period Economic life of asset 2...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease...
On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 10% rate of return for providing long-term financing. The lease agreement specified the following: Ten annual payments of $60,000 beginning January 1, 2021, the beginning of the lease and each December 31 thereafter through 2029. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $354,849. The lease qualifies...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT