Larkspur Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Crane Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Crane has the option to purchase the equipment for $21,000 upon termination of the lease. It is not reasonably certain that Crane will exercise this option. 2. The equipment has a cost of $220,000 and fair value of $259,000 to Larkspur Leasing. The useful economic life is 2 years, with a residual value of $21,000. 3. Larkspur Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Larkspur Leasing is probable. Click here to view factor tables. Prepare the journal entries on the books of Larkspur Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Choose the correct Date Account Titles and Explanation Debit Credit 1/1/2012/31/2012/31/21 enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount 1/1/2012/31/2012/31/21 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount 1/1/2012/31/2012/31/21 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Assuming that Crane exercises its option to purchase the equipment on December 31, 2021, prepare the journal entry to record the sale on Larkspur Leasing’s books. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 12/31/21 enter an account title for the journal entry on December 31 2021 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 2021 enter a debit amount enter a credit amount PLEASE FOLLOW DIRECTIONS THIS IS THE FOURTH TIME I AM RESUBMITTING QUESTIONS TODAY, FILL IN THE BOXES AS YOU SEE THEM TO RECORD THE LEASE HAS 4 JOURNAL ENTRIES THE NEXT PART HAS TWO AND THE LAST PART HAS TWO PLEASE READ THE QUESTION CAREFULLY.
Larkspur Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Crane Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Crane has the option to purchase the equipment for $21,000 upon termination of the lease. It is not reasonably certain that Crane will exercise this option. 2. The equipment has a cost of $220,000 and fair value of $259,000 to Larkspur Leasing. The useful economic life is 2 years, with a residual value of $21,000. 3. Larkspur Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Larkspur Leasing is probable. Click here to view factor tables. Prepare the journal entries on the books of Larkspur Leasing to reflect the payments received under the lease and to recognize income for the years 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Choose the correct Date Account Titles and Explanation Debit Credit 1/1/2012/31/2012/31/21 enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 2020 enter a debit amount enter a credit amount 1/1/2012/31/2012/31/21 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount 1/1/2012/31/2012/31/21 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Assuming that Crane exercises its option to purchase the equipment on December 31, 2021, prepare the journal entry to record the sale on Larkspur Leasing’s books. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 12/31/21 enter an account title for the journal entry on December 31 2021 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 2021 enter a debit amount enter a credit amount PLEASE FOLLOW DIRECTIONS THIS IS THE FOURTH TIME I AM RESUBMITTING QUESTIONS TODAY, FILL IN THE BOXES AS YOU SEE THEM TO RECORD THE LEASE HAS 4 JOURNAL ENTRIES THE NEXT PART HAS TWO AND THE LAST PART HAS TWO PLEASE READ THE QUESTION CAREFULLY.
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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PLEASE FOLLOW DIRECTIONS THIS IS THE FOURTH TIME I AM RESUBMITTING QUESTIONS TODAY, FILL IN THE BOXES AS YOU SEE THEM TO RECORD THE LEASE HAS 4 JOURNAL ENTRIES THE NEXT PART HAS TWO AND THE LAST PART HAS TWO PLEASE READ THE QUESTION CAREFULLY.
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