The Metro Company (lessee) leased equipment from Denver Industries on January 1, 2021. Denver (lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term 3 years Annual payments $120,000 beginning Jan. 1, 2021 Life of asset 3 years Lessor's implicit interest rate 8% Lessee's incremental rate 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Denver would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for Denver on January 1, 2021. Round to nearest dollar.. 3. Prepare the adusting journal entry for Denver on December 31, 2021. Round to nearest dollar.
The Metro Company (lessee) leased equipment from Denver Industries on January 1, 2021. Denver (lessor) manufactured the equipment at a cost of $270,000. Other information: Lease term 3 years Annual payments $120,000 beginning Jan. 1, 2021 Life of asset 3 years Lessor's implicit interest rate 8% Lessee's incremental rate 9% Required: Round your answers to the nearest whole dollar amounts. 1. Calculate the amount of lease receivable that Denver would report in this sales-type lease. Round to nearest dollar. Show calculations. If not, no credit. 2. Prepare the appropriate journal entries for Denver on January 1, 2021. Round to nearest dollar.. 3. Prepare the adusting journal entry for Denver on December 31, 2021. Round to nearest dollar.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.5AP
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The Metro Company (lessee) leased equipment from Denver Industries on January 1, 2021.
Denver (lessor) manufactured the equipment at a cost of $270,000.
Other information:
Lease term 3 years
Annual payments $120,000 beginning Jan. 1, 2021
Life of asset 3 years
Lessor's implicit interest rate 8%
Lessee's incremental rate 9%
Required:
Round your answers to the nearest whole dollar amounts.
1. Calculate the amount of lease receivable that Denver would report in this sales-type lease.
Round to nearest dollar. Show calculations. If not, no credit.
Denver (lessor) manufactured the equipment at a cost of $270,000.
Other information:
Lease term 3 years
Annual payments $120,000 beginning Jan. 1, 2021
Life of asset 3 years
Lessor's implicit interest rate 8%
Lessee's incremental rate 9%
Required:
Round your answers to the nearest whole dollar amounts.
1. Calculate the amount of lease receivable that Denver would report in this sales-type lease.
Round to nearest dollar. Show calculations. If not, no credit.
2. Prepare the appropriate journal entries for Denver on January 1, 2021. Round to nearest
dollar..
3. Prepare the adustingjournal entry for Denver on December 31, 2021. Round to nearest dollar.
dollar..
3. Prepare the adusting
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