On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. • Aqua and Maywood expect the residual value at December 31, 2027, to be $70,000. Negotiations led to Maywood guaranteeing a $100,000 residual value. Equal payments under the lease are $140,000 and are due on December 31 of each year with the first paymen made on December 31, 2024. Maywood is aware that Aqua used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lea Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. our final answers to the nearest whole dollar.

On January 1, 2024, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. • Aqua and Maywood expect the residual value at December 31, 2027, to be $70,000. Negotiations led to Maywood guaranteeing a $100,000 residual value. Equal payments under the lease are $140,000 and are due on December 31 of each year with the first paymen made on December 31, 2024. Maywood is aware that Aqua used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2024 and December 31, 2024, related to the lea Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. our final answers to the nearest whole dollar.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 3MCQ

See similar textbooks

Similar questions

Please answer in good accounting form. Thank you! 1. On September 1, 2021, AYE Company entered into one-year nonrenewable lease, commencing on that date, for an office space and made the following payments to XYZ Properties:• Bonus to obtain lease - ₱ 120,000• First month’s rent - ₱ 40,000• Last month’s rent - ₱ 40,000The lease is considered “Short-term lease” in its income statement for the year ended Dec. 31, 2021. What amount should AYE report as rent expense for the year ended, December 31, 2021? 2. On January 1, 2021, BEE Corporation signed a 3-year operating lease for various office furniture and equipment at ₱300,000 per year. The lease included a provision for additional rent of 5% of annual company sales in excess of ₱2,000,000. BEE’s sales for the year ended Dec. 31, 2021 were ₱2,500,000. Upon execution of the lease, BEE Corporation paid ₱100,000 as a bonus for the lease What is BEE’s rent expense for the year ended December 31, 2021 if the lease is considered a “Low…
Required information Skip to question [The following information applies to the questions displayed below.] On November 1, 2022, Gordon Company collected $9,660 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on April 30, 2023, at which time the contract may be renewed. c. Suppose the advance collection received on November 1, 2022, covered an 24-month lease period at the same amount of rent per month. How should Gordon Company report the unearned rent amount on its December 31, 2022, balance sheet? Current liability? Noncurrent liability?
1. An insurance policy, good for one year, was purchased on April 1, 2020 and has a valueof $25,000.a) Write the journal entry to record the original purchase of the insurance policy onApril 1.b) Write the adjusting journal entry required on April 31, 2020 to reflect the use of onemonth of the insurance service. What, concerning Insurance, would appear on theBalance Sheet? What would appear on the Income Statement?c) Write the adjusting journal entry required on May 31, 2020 to reflect the use of onemore month of the insurance service. What, concerning Insurance, would appear onthe Balance Sheet? What would appear on the Income Statement?
On June 7,2019, Dilby Mechanical Corp completed $50,00 of servicing work for a client and billed them for that amount plus a GST of $2,500 and PST of $3,50; terms are N20. Required: a. Prepare the journal entry as it would appear in Dilby's accounting records. b. Assume the receivable established on June 7 was collected on June 27. Record the entry.
How much should Thelma report as net investment in lease on December 31, 2022 statement of financial position? a. P 291,049 b. P 320,154 c. P 321, 049 d. P 331, 049 please explain the answer and provide the solution in good accounting form.
WITH SOLUTION-COMPUTATION 63. On July 1, 2019, an entity leased an equipment to a lessee under a 3-year operating lease. Total rent for the lease term is P3,600,000, payable P50,000 monthly for the first lease year, P75,000 monthly for the second lease year and P175,000 monthly for the third lease year. All payments were made when due. On June 30, 2021, what amount should be reported as accrued rent receivable?a. 2,100,000b. 1,200,000c. 900,000d. 0
On 1 January 2020, a tenant paid OMR 18000 in advance for rental to Dhofar LLC for the next six months. At the end of April 2020, 4 month advanced rental amount has been expired. Record the expired rental income at the end of April 2020. Select one: a. Date Particulars Debit (OMR) Credit (OMR) April 30 Prepaid Rental Income Dr. Rental Income Cr. 18000 18000 b. Date Particulars Debit (OMR) Credit (OMR) April 30 Cash Dr. Unearned Rental Income Cr. 18000 18000 c. Date Particulars Debit (OMR) Credit (OMR) April 30 Rental Income Receivable Dr. Rental Income Cr. 12000 12000 d. Date Particulars Debit (OMR) Credit (OMR) April 30 Prepaid Rental Income Dr. Rental Income Cr. 12000 12000 e. Date Particulars Debit (OMR) Credit (OMR) April 30 Rental Expenses Dr. Prepaid Rent Cr. 12000 12000 f. Date Particulars Debit (OMR) Credit (OMR) April 30 Unearned Rental Income Dr. Rental…
Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1, 2019, to provide plant watering services for Lola Inc.s office buildings. Jennifers received 4 months' service fees in advance on signing the contract. Required: 1. Prepare Jennifers journal entry to record the cash receipt for the first 4 months. 2. Prepare Jennifers adjusting entry at December 31, 2019. 3. CONCEPTUAL CONNECTION How would the advance payment (account(s) and amounts(s)] be reported in Jennifers December 31, 2019, balance sheet? How would the advance payment [account(s) and amount(s)] be reported in Lolas December 31, 2019, balance sheet?
On 01.012022 the company agrees with the tenant to leave the lease before the end date 31.12.2025. The monthly rent is €100. In order to leave, it is agreed to give compensation of all rents from the company to the tenant. That is, €3600.00 will be given as compensation.What accounting entry will be made at the end of each year?Will uncollected revenue be recorded?
3. On November 1, 2020, three months' rent was paid in advance, with a value of $4,500.a) Write the journal entry to record the original purchase of the rent service in advance.b) Write the adjusting entry required, if this business uses a fiscal period of one year, onDecember 31, 2020.c) What would appear on the Balance Sheet concerning Rent on December 31, 2020?d) What would appear on the Income Statement concerning Rent for the year endingDecember 31, 2020?
The following additional information is available at the December 31 2020 year end. A) insurance expense represent a 3 year insurance policy for the period from Jan 1 2020 to Dec 31 2022. B) a count of office supplies reveals that at Dec 31 2020, the company had $500 of offiice supplies on hand. C) the company's lease, signed on Jan 1 2020, specifies monthly rent of $4,000 or $48,000 a year. D) The December 2020 utility bill has not yet been received and is not included in the trial balance. The utility bill averages $400 a month. Using the information above, find the balances in the following account balances, after adjustment at dec31 2020: prepaid insurance Office supplies expense Prepaid rent Utilities expense
Please answer in good accounting form Thankyou 1. How much is to be reported in the statement of financial position as lease liability for the year ended December 31, 2021? 2. 2. What is the interest expense for the calendar year 2022? (round off answer to the nearest WHOLE NUMBER) 3. How much depreciation expense is to be recorded for the year ended 2021? (present answer with 2 DECIMAL PLACES)