- The 4 99 625 Parts Are Wrong I Just Need Those 4 Parts 1 (112.68 KiB) Viewed 12 times
The 4 "99,625" parts are wrong. I just need those 4 parts
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answerhappygod
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The 4 "99,625" parts are wrong. I just need those 4 parts
The 4 "99,625" parts are wrong. I just need those 4 parts
Recording Entries for Finance Lease-No Residual, Payments Increase at a Defined Rate On December 30, 2019, Drew Company leased equipment under a lease for a period of 5 years. Drew contracted to pay $153,000 on December 31, 2019, with an annual increase of 3% (calculated on the previous year's lease payment) for each of the next four years due on December 31. The leased equipment has a useful life of 7 years, a fair value of $765,000, and the interest rate implicit in the lease is 8% and is known to Drew Company. a. How would Drew Company classify the lease? Finance Lease Amortization Schedule Journal Entries c. Prepare the entries for Drew Company for years 2019, 2020 and 2021. • Note: Round your answers to the nearest whole dollar. • Note: List multiple debits or credits (when applicable) in alphabetical order. Date Dec. 31, 2019 Account Name Right-of-Use Asset ◆ Lease Liability ◆ To record asset and liability related to lease ◆ → Dec. 31, 2019 Lease Liability Cash To record lease payment Dec. 31, 2020 Interest Expense Lease Liability Cash To record interest Dec. 31, 2020 Amortization Expense Right-of-Use Asset To record amortization Dec. 31, 2021 Interest Expense Lease Liability Cash To record lease payment Dec. 31, 2021 Amortization Expense Right-of-Use Asset To record amortization ♦ ◆ + ♦ ◆ ◆ ◆ ◆ ◆ ◆ ♦ Dr. 697,373 0 153,000 0 43,550 114,040 0 99,625 0 34,427 127,891 0 99,625 0 Cr. 0 697,373 153,000 0 157,590 0 99,625 0 0 162,318 0 99,625 ↑
Recording Entries for Finance Lease-No Residual, Payments Increase at a Defined Rate On December 30, 2019, Drew Company leased equipment under a lease for a period of 5 years. Drew contracted to pay $153,000 on December 31, 2019, with an annual increase of 3% (calculated on the previous year's lease payment) for each of the next four years due on December 31. The leased equipment has a useful life of 7 years, a fair value of $765,000, and the interest rate implicit in the lease is 8% and is known to Drew Company. a. How would Drew Company classify the lease? Finance Lease Amortization Schedule Journal Entries c. Prepare the entries for Drew Company for years 2019, 2020 and 2021. • Note: Round your answers to the nearest whole dollar. • Note: List multiple debits or credits (when applicable) in alphabetical order. Date Dec. 31, 2019 Account Name Right-of-Use Asset ◆ Lease Liability ◆ To record asset and liability related to lease ◆ → Dec. 31, 2019 Lease Liability Cash To record lease payment Dec. 31, 2020 Interest Expense Lease Liability Cash To record interest Dec. 31, 2020 Amortization Expense Right-of-Use Asset To record amortization Dec. 31, 2021 Interest Expense Lease Liability Cash To record lease payment Dec. 31, 2021 Amortization Expense Right-of-Use Asset To record amortization ♦ ◆ + ♦ ◆ ◆ ◆ ◆ ◆ ◆ ♦ Dr. 697,373 0 153,000 0 43,550 114,040 0 99,625 0 34,427 127,891 0 99,625 0 Cr. 0 697,373 153,000 0 157,590 0 99,625 0 0 162,318 0 99,625 ↑