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amm1812
1 year ago
6

Ely Roofing Contractors enters into a lease for the use of new equipment. The term of the lease is three years. The annual lease

amount is $6,000. The present value of the lease payments is $50,000. Ely Roofing estimates the economic life of the equipment to be five years. The lease is considered a finance lease. The journal entry to record the initial transaction will include a
Business
1 answer:
Afina-wow [57]1 year ago
5 0

The journal entry to record the initial transaction (Right of Use Asset and Lease Liability of $50,000) for Ely Roofing Contractors, who enters into a lease for the use of new equipment for 3 years at an annual lease payment of $6,000 is as follows:

<h3>Journal Entry:</h3>

Debit Right of Use Asset $50,000

Credit Lease Liability $50,000

  • To record the initial transaction of the Lease Liability and the Right of Use Asset.

<h3>How to record the initial lease transactions?</h3>

The present value of annual lease payments is first computed.  

With this figure, the recording of the asset and liability is completed by debiting the Right of Use Asset and crediting the Lease Liability account.

<h3>Data and Calculations:</h3>

Annual lease payment = $6,000

Present value of lease payments = $50,000

Economic life of the equipment = 5 years

Lease term = 3 years

Nature of lease = finance lease

<h3>Initial Transaction Analysis:</h3>

Right of Use Asset $50,000 Lease Liability $50,000

Learn more about recording the initial transaction of a finance lease at brainly.com/question/16646812

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Answer:

The correct answer is letter "B": Interpersonal skills are important throughout a manager's career, at every level of management.

Explanation:

Managerial skills are the set of capabilities high-rank executives must develop in the course of their careers to conduct businesses efficiently. Communication, decision-making, problem-solving, and motivation are some of the interpersonal characteristics they must meet.

6 0
3 years ago
On July 1, 2004, Gee, Inc. leased a delivery truck from Marr Corp. under a 3-year operating lease. Total rent for the term of th
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Answer:

$9,000

Explanation:

Given:

Date on which the delivery truck has been leased = July 1, 2004

Total rent  for the lease = $36,000

Total operating lease time = 3 years

Thus,

Per year lease amount to be paid = $36,000 / 3 = $12,000

Payable amount as:

12 months at $500 = $6,000

12 months at $750 = $9,000

12 months at $1,750 = $21,000

Now,

on June 30, 2006  year of lease has been completed

therefore, the total revenue to be received by the Marr corp. on June 30, 2006 will be:

$12,000 × 2 = $24,000 should be received by the June 30, 2006

but,

The actual amount received during 2 years duration

=   12 months at $500 + 12 months at $750

= $6,000 + $9,000

= $15,000

Therefore,

The amount to be reported in the rent receivable on June 30, 2006

= total revenue to be received -  actual amount received

= $24,000 - $15,000

= $9,000

4 0
3 years ago
What is land as a factor of production?
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3 years ago
Assuming everything else stays the same, an increase in the price of laptop computers will __________ of laptop computers. a) de
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8 0
2 years ago
Following are selected transactions for Vitalo Company. Nov. 1 Accepted a $6,000, 180-day, 8% note dated November 1 from Kelly W
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Answer:

<u>As at April 30</u>

Dr. Account Receivable (120 days / 180 days x 6000 x 0.08) ..$320

Cr. Interest Income......................................................................................$320

Being accrued interest Income for current year to date on note receivable

Dr. Bank..............................................................................................$6,483

Cr. Accounts Receivable ($6000 note receivable + $163 + $320)...$6,483

Being settlement of note receivable with total accrued interest Income

Explanation:

Following are selected transactions for Vitalo Company.

Nov. 1 Accepted a $6,000, 180-day, 8% note dated November 1 from Kelly White in granting a time extension on her past-due account receivable.

<u>As at November 1</u>

Account receivable = $6,000 and Note Receivable = $6000

Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note.

<u>As at December 31</u>

Dr. Account Receivable (61 days /180 days x 6000 x 0.08) ..$163

Cr. Interest Income......................................................................................$163

Apr. 30 White honored her note when presented for payment; February has 28 days for the current year.

<u>As at April 30</u>

Dr. Account Receivable (120 days / 180 days x 6000 x 0.08) ..$320

Cr. Interest Income......................................................................................$320

Being accrued interest Income for current year to date on note receivable

Dr. Bank..............................................................................................$6,483

Cr. Accounts Receivable ($6000 note receivable + $163 + $320)...$6,483

Being settlement of note receivable with total accrued interest Income

4 0
3 years ago
Read 2 more answers
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