Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022. Other information: Lease term 3 years Annual payments $40,000 on January 1 each year Life of asset 3 years Implicit interest rate 8% There is no expected residual value. Required: 1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as the present value of future lease payments. Explain how you compute this PV. 2. Prepare appropriate journal entries for Broncos for 2022. Assume straight-line amortization and a December 31 year-end. Round your answers to the nearest whole dollar amounts. January 1, 2022: December 31, 2022:
Broncos Company leased equipment from Wilson-Tech Leasing on January 1, 2022.
Other information:
Lease term 3 years
Annual payments $40,000 on January 1 each year
Life of asset 3 years
Implicit interest rate 8%
There is no expected residual value.
Required:
1. Using the Excel (not formula or PV tables), compute the amount of Right-of-Use Asset as the
present value of future lease payments. Explain how you compute this PV.
2. Prepare appropriate
and a December 31 year-end. Round your answers to the nearest whole dollar amounts.
January 1, 2022:
December 31, 2022:
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