FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement
specified three annual lease payments of $96,000 each, beginning December 31, 2024, and on each December 31 through 2026. The
lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 5%. Winn also paid a $321,000 advance payment
at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the
space at a cost of $417,000. The useful life of the building and the structural modifications were estimated to be 30 years with no
residual 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)
Required:
Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is
the calendar year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your
vers to the nearest whole dollar.
View transaction list
Journal entry worksheet
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Record the beginning of the lease for Winn.
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