Deal Leasing leased equipment to Hand Company on January 1, 2018. The lease payments were calculated...

Deal Leasing leased equipment to Hand Company on January 1, 2018. The lease payments were calculated to provide the lessor a 8% return. Eight annual lease payments of $57,000 are due at the beginning of each year beginning January 1, 2018. The present value of an annuity due of $1 at 8 for Eight periods is 6.20637.

Required: Consider this to be a finance lease. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) 1. Prepare the journal entries to record the lease by Hand (lessee) at January 1, 2018.

-Record the lease January 01, 2018

-Record the cash payment January 01,2018 2.

2. Prepare the journal entries to record the lease by Hand (lessee) at December 31, 2018, the end of the first reporting period

-Record accrued interest December 31, 2018

-Record the amortization expense December 31, 2018

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On January 1, 2018, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease....

On January 1, 2018, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic. Portions of the Equipment Leasing’s lease amortization schedule appear below: Jan. 1 Payments Effective Interest Decrease in Balance Outstanding Balance 191,981 2018 20,500 0 20,500 171,481 2018 20,500 17,148 3,352 168,129 2019 20,500 16,813 3,687 164,442 2020 20,500...

Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term...

Eastern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Other information: Lease term 4 years Annual payments $89,000 on January 1 each year Life of asset 4 years Implicit interest rate 8% PV, annuity due, 4 periods, 8% 3.5771 PV, ordinary annuity, 4 periods, 8% 3.3121 Hi-Tech's cost of the equipment $318,362 There is no expected residual value. Required: Prepare appropriate journal entries for Hi-Tech Leasing for 2018 and 2019. Assume a December 31 year-end. (If no...

On January 1, 2018, Packard Corporation leased equipment to Hewlitt Company. The lease term is eight...

On January 1, 2018, Packard Corporation leased equipment to Hewlitt Company. The lease term is eight years. The first payment of $450,000 was made on January 1, 2018. Remaining payments are made on December 31 each year, beginning with December 31, 2018. The equipment cost Packard Corporation $2,400,000. The present value of the lease payments is $2,640,788. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 10%, what will be the balance...

On January 1, 2018, Betty DeRose, Inc. leased office furniture and equipment from Young Leasing Company....

On January 1, 2018, Betty DeRose, Inc. leased office furniture and equipment from Young Leasing Company. The terms of the lease require annual payments of $50,000 for 10 years with the first payment being due on December 31, 2018. Assume the interest rate on the lease is 10% and the lease qualifies as a capital lease. Betty DeRose depreciates all assets using the double-declining balance method. Calculate the amount of the lease balance liability at December 31, 2019 that would...

On January 1, 2018, Betty DeRose, Inc. leased office furniture and equipment from Young Leasing Company....

On January 1, 2018, Betty DeRose, Inc. leased office furniture and equipment from Young Leasing Company. The terms of the lease require annual payments of $50,000 for 10 years with the first payment being due on December 31, 2018. Assume the interest rate on the lease is 10% and the lease qualifies as a capital lease. Betty DeRose depreciates all assets using the double-declining balance method. Calculate the balance in the lease liability account on December 31, 2019 after the...

On January 1, 2018, Betty DeRose, Inc. leased office furniture and equipment from Young Leasing Company....

On January 1, 2018, Betty DeRose, Inc. leased office furniture and equipment from Young Leasing Company. The terms of the lease require annual payments of $50,000 for 10 years with the first payment being due on December 31, 2018. Assume the interest rate on the lease is 10% and the lease qualifies as a capital lease. Betty DeRose depreciates all assets using the double-declining balance method. Calculate the total amount of expense related to this lease reported on Betty's 2019...

ASD Company leased equipment from ZXC Leasing Company on January 1, 2017. ZXC Leasing Company purchased...

ASD Company leased equipment from ZXC Leasing Company on January 1, 2017. ZXC Leasing Company purchased the equipment from QWE Company at a cost of $85,000 and added the equipment to its inventory of items available for lease. Additional details of the lease are as follows. Quarterly lease payments $15,000 Lease term 2 years Asset's useful life 6 years Asset's fair value at date of inception $113,000 Purchase option lessee is reasonably certain to exercise No Title transfer after lease...

Wondershade Company leased equipment from Saturnetworks on January 1, 2014. Lease Term 3 years Annual Payments...

Wondershade Company leased equipment from Saturnetworks on January 1, 2014. Lease Term 3 years Annual Payments $40,000 on January 1 each year Life of asset 3 years Implicit Interest Rate 8% Incremental Rate 8% PV, annuity due, 3 periods, 8% 2.7833 PV, ordinary annuity 3 periods, 8% 2.5771 There is no expected residual value. Prepare a completed amortization table. Prepare appropriate journal entries for Wondershade Company for 2014 and 2015. Assume straight-line depreciation and a December 31 year-end. There should...

Marin Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to...

Marin Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Cullumber Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Cullumber has the option to purchase the equipment for $21,500 upon termination of the lease. It is not reasonably certain that Cullumber will exercise this option. 2. The equipment has a cost of $230,000 and...

Subjects