Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2024. Courtney purchased the equipment from Doane Machines at a cost of $251,000, its fair value. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $16,000 on January 1, 2024, and on March 31, June 30, September 30, and December 31 thereafter Economic life of asset 5 years Interest rate charged by the lessor 4% Required: Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2024. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.
Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2024. Courtney purchased the equipment from Doane Machines at a cost of $251,000, its fair value. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $16,000 on January 1, 2024, and on March 31, June 30, September 30, and December 31 thereafter Economic life of asset 5 years Interest rate charged by the lessor 4% Required: Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2024. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2024. Courtney purchased the equipment from Doane Machines at a cost of $251,000, its fair value.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
| Related Information: | ||
|---|---|---|
| Lease term | 2 | years (8 quarterly periods) |
| Quarterly lease payments | $16,000 | on January 1, 2024, and on March 31, June 30, September 30, and December 31 thereafter |
| Economic life of asset | 5 | years |
| Interest rate charged by the lessor | 4% |
Required:
Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2024. December 31 is the fiscal year end for each company. Appropriate
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