Question
In: Accounting
On Dec. 31, 2017, the Eastville City water department leased equipment under a noncancelable lease agreement...
On Dec. 31, 2017, the Eastville City water department leased equipment under a noncancelable lease agreement that transferred title to the city after making seven payments of $ 15,250. The present value (6% interest) of the minimum lease payments is $90,250. Payments are to take place on December 31 beginning in 2017.
Required: Prepare journal entries for 2017 and 2018 assuming the estimated useful life of the equipment is 10 years.
(B) Big City provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000 while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a 5 year period, beginning this year. Finally assume the City is amortizing a deferred inflow resulting from a change in plan assumptions from a prior year in the amount of $10,000 per year.
Required: Prepare journal entries to record annual pension expense for the enterprise fund.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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