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Shalnov [3]
3 years ago
6

Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Teal Mountain Company. The following informat

ion relates to this agreement.
1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years.
2. The fair value of the asset at January 1, 2020, is $74,000.
3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $3,000, none of which is guaranteed.
4. The agreement requires equal annual rental payments of $24,716 to the lessor, beginning on January 1, 2020.
5. The lessee’s incremental borrowing rate is 5%. The lessor’s implicit rate is 4% and is unknown to the lessee.
6. Teal Mountain uses the straight-line depreciation method for all equipment.

Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 0 decimal places, e.g. 5,265.)

Prepare all of the journal entries for the lessee for 2020 and 2021 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.)

Business
1 answer:
SpyIntel [72]3 years ago
3 0

Answer:

The journal entries are attached

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3 years ago
A weaker dollar benefits ---------- and hurts-----------
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A weaker dollar benefits EXPORTERS and hurts IMPORTERS.

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6 0
3 years ago
A company reports the following amount in its December 31, Year 1, income statement.
kow [346]

Answer:

Multiple-step income statement for the year ending December 31, year 1

Sales                                                    $275,200

Cost of Goods Sold                           <u>($185,000)</u>

Gross Profit                                                               $90,200

Operating Expenses:

Administrative Expense                                          ($35,000)

Selling expenses                                                     <u>($55,000)</u>

General Expense                                                     <u>($45,000)</u>

Operating Income                                                    ($44,800)

Non-Operating Revenue                                         <u>$105,000</u>

Operating Income before tax                                  $60,200

Income taxes                                                            <u>($25,000)</u>

Operating Income after Tax                                     <u>$35,200</u>

Explanation:

Multi-step Income statement segregate the Operating Income and Expenses from non operating Income and Expense. It shows the gross profit and net operating income separately.

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Answer:

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They will use the financing statement to ensure the fairness of the business and to receive proper amount of tax.

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Current or potential investors would check financial statements to ensure they will suitable returns after investment.

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Employees :

The employees will ask for bonus if the company performance in statements is good,

8 0
2 years ago
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