Leased assets On January 1, 2021, the chief operating officer of New Belgium, Jeff Stambaugh, signed a noncancellable lease for street equipment. The lease was for 10 years. The present value of payments expected to be made during the lease is $75,152. The township’s incremental borrowing rate is 7 percent. The $10,000 annual lease payment is due on the first day of each year beginning in 2021. Prepare all journal entries necessary to record the lease transaction for 2021 and the payment made in 2022. (Assume the government uses a voucher system.)
Leased assets On January 1, 2021, the chief operating officer of New Belgium, Jeff Stambaugh, signed a noncancellable lease for street equipment. The lease was for 10 years. The present value of payments expected to be made during the lease is $75,152. The township’s incremental borrowing rate is 7 percent. The $10,000 annual lease payment is due on the first day of each year beginning in 2021. Prepare all journal entries necessary to record the lease transaction for 2021 and the payment made in 2022. (Assume the government uses a voucher system.)
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 9E: Lessor Accounting with Guaranteed Residual Value Use the information for Edom Company in E20-8,...
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Leased assets
On January 1, 2021, the chief operating officer of New Belgium, Jeff Stambaugh, signed a noncancellable lease for street equipment. The lease was for 10 years.
The present value of payments expected to be made during the lease is $75,152. The township’s incremental borrowing rate is 7 percent. The $10,000 annual lease payment is due on the first day of each year beginning in 2021.
Prepare all
(Assume the government uses a voucher system.)
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