10 Paris Company (parent) owns 70 percent of the common stock of Salt 1* 2015, P

Question

10 Paris Company (parent) owns 70 percent of the common stock of Salt 1* 2015, Paris (Lessor) purchased a machine a useful life of S years with no salvage value. The lease t due on January 1" of each year, starting January 1" for $5,000 at the end of the lease term. Assume that the machine will be method over its useful life both Paris and Salt Lake is 12 percent for $10,000 and leased it to Salt Lake (Lessee). The machine has term is 2 years, with an annual lease payment of $3,177 2015. Salt Lake has the option to purchase the machine depreciated using the stralight line (5 years) rather than the lease term (2 years). The implicit interest rate used by Lake Company (subsidiary). On January The following is the lease amortization schedule for both Paris and Salt Lake. Date 1/1/2015 1/1/2016 Reduction in Principal6823 Principal Balance 3177 3177 50005 11354 3177 2358 4465 10000 819 4465 16 1354 Which of the following would be included in the entry (or entries) that Paris records on its individual books on January 1, 2015? 26. a. Credit Unearned Interest Income $1,354 b. Credit Accounts Payable (or Machinery) $10,000 c. Debit Cash 3177 d. All of these 27. Which of the following entries would be prepared by Salt Lake on its individual books on January 1",2015? Debit Assets under Capital Lease $10,000, Credit Obligations under Capital Lease $6,823, Credit Cast a. $3,177 b. Debit Assets Under Capital Lease $6,823, Credit Obligations under Capital Lease $6,823. c. Debit Rent Expense $3,177, Credit Cash $3,177. d. Both A and C.

Explanation / Answer

Answer:-After study the given passage we get answer of following question, these answer are given below.

26 -b

27 -a

28 -c

29 -c

30 -c

31 -a

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