On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $102,000 each, beginning December 31, 2024, and on each December 31 through 2026. The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 5%. Winn also paid a $183,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $285,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. 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: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar. View transaction list Journal entry worksheet 1 2 Record the beginning of the lease for Winn. Date January 01, 2024 3 4 5 6 7 8 Note: Enter debits before credits. Record entry General Journal Clear entry Debit 12 Credit View general journal >
On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $102,000 each, beginning December 31, 2024, and on each December 31 through 2026. The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 5%. Winn also paid a $183,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $285,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. 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: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar. View transaction list Journal entry worksheet 1 2 Record the beginning of the lease for Winn. Date January 01, 2024 3 4 5 6 7 8 Note: Enter debits before credits. Record entry General Journal Clear entry Debit 12 Credit View general journal >
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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Transcribed Image Text:On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement
specified three annual lease payments of $102,000 each, beginning December 31, 2024, and on each December 31 through 2026.
The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 5%. Winn also paid a $183,000 advance
payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before
occupying the space at a cost of $285,000. The useful life of the building and the structural modifications were estimated to be 30
years with no residual value.
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:
Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year
is the calendar year.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your
answers to the nearest whole dollar.
View transaction list
Journal entry worksheet
1
2
Date
January 01, 2024
3
Note: Enter debits before credits.
Record the beginning of the lease for Winn.
Record entry
4
5 6 7 8
General Journal
Clear entry
Debit
12
Credit
View general journal
>
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