On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $794,023 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $106,000. Negotiations led to the lessee guaranteeing a $152,000 residual value. Equal payments under the lease are $206,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) . . ● ● Required: 1. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease. 1 Complete this question by entering your answers in the tabs below. Required 1 No Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar. Required 2 2 Answer is not complete. Date January 01, 2024 Right-of-use asset Lease payable January 01, 2024 Lease receivable Equipment General Journal Debit 794,023 Credit 794,023
On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $794,023 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $106,000. Negotiations led to the lessee guaranteeing a $152,000 residual value. Equal payments under the lease are $206,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) . . ● ● Required: 1. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease. 1 Complete this question by entering your answers in the tabs below. Required 1 No Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to the nearest whole dollar. Required 2 2 Answer is not complete. Date January 01, 2024 Right-of-use asset Lease payable January 01, 2024 Lease receivable Equipment General Journal Debit 794,023 Credit 794,023
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 6E: Lessor Accounting Issues Ramsey Company leases heavy equipment to Terrell Inc. on March 1, 2019, on...
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Transcribed Image Text:On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at
which time possession of the leased asset will revert back to Nevels.
●
.
Negotiations led to the lessee guaranteeing a $152,000 residual value.
Equal payments under the lease are $206,000 and are due on December 31 of each year with the first payment being made on
December 31, 2024.
Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
●
Required:
1. Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease.
2. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease.
The equipment cost Nevels $794,023 and has an expected economic life of five years.
Nevels expects the residual value on December 31, 2027, will be $106,000.
Complete this question by entering your answers in the tabs below.
Required 1
No
1
Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your
intermediate and final answers to the nearest whole dollar.
2
Required 2
X Answer is not complete.
Date
January 01, 2024 Right-of-use asset
Lease payable
January 01, 2024 Lease receivable
Equipment
General Journal
Debit
794,023
Credit
794,023
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