Grichuk Power leased high-tech electronic equipment from Kolten Leasing on Janua
ID: 342251 • Letter: G
Question
Grichuk Power leased high-tech electronic equipment from Kolten Leasing on January 1, 2018. Kolten purchased the equipment from Wong Machines at a cost of $251,500, its fair value. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) See Bottom Journal Entry Please. I'm stuck on what to put/how to calculate for the last two entries) Thank you!!!
Required:
Prepare a lease amortization schedule and appropriate entries for Grichuk Power from the commencement of the lease through December 31, 2018. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.
Journal Entries *** Help!! 1/1/18
Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $16,500 at Jan. 1, 2018, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. Economic life of asset 5 years Interest rate charged by the lessor 8%Explanation / Answer
Answer
Journal entries
Amortization Expense = Cost of Asset/Useful Life
=$251500 / 5years = $50300
Date Particulars Dr Cr 3/31/18 Interest Expense 2136 Lease Payable 14364 Cash 16500 Amortization Expense 50300 Right-of- use Asset 50300Related Questions
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