Dec 31 Purchased new equipment for P750,000, paying P150,000 cash and signing a 3-year, 7% note for the remainder. The note will be paid in three cqual, annual installments of P200,000 starting December 31, 2022. Dec 31 Honored warranty contracts on 12 units for a total cost of P11,500. Coverage for 30 units have expired from the warranty contracts included in the December 1 balance. Repair costs for these units were estimated at P675. Requirements: a. Journalize each transaction and prepare the necessary adjusting entries. b. Prepare the liabilities section of the balance sheet for the year ended December 31, 2021.
Dec 31 Purchased new equipment for P750,000, paying P150,000 cash and signing a 3-year, 7% note for the remainder. The note will be paid in three cqual, annual installments of P200,000 starting December 31, 2022. Dec 31 Honored warranty contracts on 12 units for a total cost of P11,500. Coverage for 30 units have expired from the warranty contracts included in the December 1 balance. Repair costs for these units were estimated at P675. Requirements: a. Journalize each transaction and prepare the necessary adjusting entries. b. Prepare the liabilities section of the balance sheet for the year ended December 31, 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 2E: Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement...
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