Recording Finance Lease Journal Entries— No ResidualValue
Pier10 Inc. entered into a 5-year lease and recorded aright-of-use asset and lease liability of $281,600 on January 1,2020. Pier10 Inc. was aware of the lessor’s implicit rate ofinterest of 5%. The equipment under lease had an estimated 5-yearuseful life with no residual value. The first lease payment of$61,945 was due upon commencement of the lease. Record Pier10Inc.’s journal entries during the year of 2020 assuming that thelease is properly classified as a finance lease.
a. January 1, 2020 Record theright-of-use asset and lease liability.
b. January 1, 2020 Record thelease payment.
c. December 31, 2020 Record the adjustingentries.
Recording Finance Lease Journal Entries No Residual Value Pier10 Inc Entered Into A 5 Year Lease And Recorded A Right 1 (8.31 KiB) Viewed 14 times
Date a. Jan. 1, 2020 b. Jan. 1, 2020 c. Dec. 31, 2020 Dec. 31, 2020 Account Name To record interest To record amortization O ◆ ◆ 4 4 ◆ O Dr. 0 0 0 0 0 0 0 0 Cr. 0 0 0 0 0 0 0 0
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