Marigold's Delivery Company and Swifty's Express Delivery exchanged delivery trucks on January 1, 2020. Marigold's truck cost €21,500. It has accumulated depreciation of €16,000 and a fair value of €2,800. Swifty's truck cost E8,000. It has accumulated depreciation of €6,400 and a fair value of €2.800. The transaction has commercial substance. Journalize the exchange for Marigold's Delivery Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Marigold's Delivery Company and Swifty's Express Delivery exchanged delivery trucks on January 1, 2020. Marigold's truck cost €21,500. It has accumulated depreciation of €16,000 and a fair value of €2,800. Swifty's truck cost E8,000. It has accumulated depreciation of €6,400 and a fair value of €2.800. The transaction has commercial substance. Journalize the exchange for Marigold's Delivery Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 37CE

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On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year beginning, December 31, 2021- P500,000• Market rate of interest- 10%• The present value of an ordinary annuity of 1 at 10% for 3 periods is 2.4869. • The present value of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the interest expense for 2021 on the lease liability relating to the right retained in the sale-leaseback transaction? (round off your final answer to the nearest peso value)
On January 1, 2021, Globe Company sold a piece of machinery to Troll Company for P1,900,000. Because of the entity’s commitments to its customers to provide their needs for the next three years, Globe Company simultaneously leased back the machinery. The transfer of the asset to the buyer qualifies to be accounted for as a sale under IFRS 15. Information relating to this transaction follows:• Fair value of machinery- P2,200,000• Carrying amount of machinery- P1,700,000• Remaining useful life of the machinery- 8 years• Lease term- 3 years• Annual rent payable at the end of each year beginning, December 31, 2021- P500,000• Market rate of interest - 10%• PV of an ordinary annuity of 1 at 10% for 3 periods is 2.4869• PV of an annuity due of 1 at 10% for 3 periods is 2.7355 How much is the lease liability recorded on January 1, 2021?