Question

On January 1, 2018, entered into a three-year lease for new office space agreeing to lease...

On January 1, 2018, entered into a three-year lease for new office space agreeing to lease payments of: $7,000 in 2018, $6,000 in 2019 and $5,000 in 2020. Payments are due on December 31 of each year with the first payment being made on December 31, 2018. Harlon is aware that the lessor used a 5% interest rate when calculating lease payments. (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: 1-4. Prepare the appropriate entries for Harlon Consulting on January 1, 2018, December 31, 2018, 2019 and 2020 to record the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.)

Homework Answers

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
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...
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...
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,...
On January 1, 2018, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year...
On January 1, 2018, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $956,000 and has an expected useful life of five years. Allied expects the residual value at December 31, 2022, will be $300,000. Negotiations led to the lessee guaranteeing a $340,000 residual value. (FV of $1, PV of $1, FVA of $1, PVA...
On January 1, 2018, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease...
On January 1, 2018, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 14% rate of return for providing long-term financing. The lease agreement specified: Ten annual payments of $61,000 beginning January 1, 2018, the beginning of the lease and each December 31 thereafter through 2026. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $315,158. The lease qualifies as a...
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,...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a six-year...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a six-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 $19,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2020, Rick’s...
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, 2018, Taco King leased retail space from Fogelman Properties. The 10-year finance lease...
On January 1, 2018, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King’s sales revenue, with a quarterly sales minimum of $440,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous 5-year period, Taco King has generated quarterly sales of over $670,000. Fogelman’s interest rate, known by Taco King, was 4%. (FV of $1, PV of $1, FVA of...
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...