Q 14 Dr Cash Select and drag the correct answers from the suggestions below into the blanks and then select Submit. Dr The Tower Inc. (as lessor) leased a building under a 15 year operating lease with annual payments of $15,000 payable in arrears. The cost of the building is $400,000 and useful life is estimated to be 50 years. As an incentive to sign the agreement, lease payments were reduced to $12,000 for the first three years. At the end of Year 1 Statement of Financial Position A What amounts will be recognised by The Tower Inc. at the end of the first year of the lease in the Statement of Financial Position and the Statement of Profit or loss and Other Comprehensive Income? Cr Income - B Cr Accumulated depreciation - $8,000 Statement of Profit or Loss and Other Comprehensive Income Dr Depreciation - $8,000 D A $12,000 $13,500 $15,000 $1,500 $2,000 $2,400 Deferred income from lease Trade receivables Financial assets D B $12,000 $14,400 $17,000

Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter11: Notes, Bonds, And Leases
Section: Chapter Questions
Problem 27E
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Q
Dr Cash
14
Dr
The Tower Inc. (as lessor) leased a building under a 15 year operating lease with annual payments of $15,000
payable in arrears. The cost of the building is $400,000 and useful life is estimated to be 50 years. As an incentive to
sign the agreement, lease payments were reduced to $12,000 for the first three years.
Select and drag the correct answers from the suggestions below into the blanks and then select Submit.
At the end of Year 1
Statement of Financial Position
A
What amounts will be recognised by The Tower Inc. at the end of the first year of the lease in the Statement of
Financial Position and the Statement of Profit or loss and Other Comprehensive Income?
B
с
Cr Accumulated depreciation - $8,000
Statement of Profit or Loss and Other Comprehensive Income
Dr Depreciation - $8,000
Cr Income -
D
Submit
A
$12,000
$13,500
$15,000
с
$1,500
$2,000
$2,400
Deferred income from lease
Trade receivables
Financial assets
D
B
$12,000
$14,400
$17,000
Transcribed Image Text:Q Dr Cash 14 Dr The Tower Inc. (as lessor) leased a building under a 15 year operating lease with annual payments of $15,000 payable in arrears. The cost of the building is $400,000 and useful life is estimated to be 50 years. As an incentive to sign the agreement, lease payments were reduced to $12,000 for the first three years. Select and drag the correct answers from the suggestions below into the blanks and then select Submit. At the end of Year 1 Statement of Financial Position A What amounts will be recognised by The Tower Inc. at the end of the first year of the lease in the Statement of Financial Position and the Statement of Profit or loss and Other Comprehensive Income? B с Cr Accumulated depreciation - $8,000 Statement of Profit or Loss and Other Comprehensive Income Dr Depreciation - $8,000 Cr Income - D Submit A $12,000 $13,500 $15,000 с $1,500 $2,000 $2,400 Deferred income from lease Trade receivables Financial assets D B $12,000 $14,400 $17,000
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