D4.Account Wildhorse Corporation is a machinery dealer whose shares trades on the TSX, and so it uses IFRS 16. Wildhorse leased a machine toErnst Ltd. on January 1, 2020. The lease is for a six-year period and requires equal annual payments of $24,792 at the beginning ofeach year. The first payment is received on January 1, 2020. Wildhorse had purchased the machine for its inventory during 2019 for$100,700. Collectibility of lease payments is reasonably predictable, and no important uncertainties exist about costs that have notyet been incurred by Wildhorse. Wildhorse set the annual rental amount to ensure an 11% rate of return. The machine has aneconomic life of six years, with no residual value, and reverts to Wildhorse at the termination of the lease.Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.Using time value of money tables, a financial calculator, or Excel functions, calculate the amount of each of the following: (Roundfactor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)1.2.3.Gross investmentUnearned interest incomeNet investment in the lease$$$ Prepare all necessary journal entries for Wildhorse for 2020. (Credit account titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts, Roundanswers to 0 decimal places, eg. 5,275.)Account Titles and ExplanationDate1/1/20(To record inception of lease andcost of goods sold.)Show Transcribed Text(To record inception of lease andcost of goods sold.)(To record interest.)DebitCredit

Lease refers to a contract between two parties under which one party who is the real owner of an…

Using time value of money tables, a financial calculator, or Excel functions, calculate the amount of each of the following: (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) 1. 2. 3. Gross investment Unearned interest income. Net investment in the lease $ $

Using time value of money tables, a financial calculator, or Excel functions, calculate the amount of each of the following: (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) 1. 2. 3. Gross investment Unearned interest income. Net investment in the lease $ $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Define Profi t and loss (P&L) statement
Define collections float
What is a data dictionary?
Define LIFO inventory pools.
Po.24.
What are the 6 Types of Input VAT?
6.
1. How important to know the different transactions cycle ?
Give me an example of ledger?