Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decim5,275.)Date1/1/201/1/201/1/211/1/221/1/231/1/241/1/2512/31/26Date11Annual LeasePayment Plus GRVAccount Titles and Explanation(To record the lease.)(To record first lease payment.)Prepare all of the journal entries for the lessee for and 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 accounttitles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g.5,275. Record journal entries in the order presented in the problem.)(To record interest.)(To record amortization.)►LA(To record interest.)PHAROAH COMPANY (Lessee)Lease Amortization Schedule(To record second lease payment.)(To record amortization.)Interest onLiabilityDebit+ACreditReduction of LeaseLiability101Lease Liability The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pharoah Company, a lessee.Commencement dateAnnual lease payment due at the beginning ofeach year, beginning with January 1,Residual value of equipment at end of lease term,guaranteed by the lesseeExpected residual value of equipment at end of lease termLease termEconomic life of leased equipmentFair value of asset at January 1,Lessor's implicit rateLessee's incremental borrowing rateJanuary 1,$126,840$55,000$50,0006 years6 years$653,0009 %9 %The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.

Lease liability refers to the financial obligation that arises from a lease agreement between a…

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pharoah Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate January 1, $126,840 $55,000 $50,000 6 years 6 years $653,000 9% 9% The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.

The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Pharoah Company, a lessee. Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate January 1, $126,840 $55,000 $50,000 6 years 6 years $653,000 9% 9% The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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