The Antonescu Sporting Goods leased equipment from Chapman Industries on January 1, 2016. The agreement causes the lessee to obtain “control” of the leased asset. Chapman Industries had manufactured the equipment at a cost of $800,000. Its cash selling price and fair value is $1,000,000. Other Information: Lease term 4 years Annual payments $279,556 beginning Jan.1, 2016, and at Dec. 31, 2016, 2017, and 2018 Life of asset 4 years Rate the lessor charges 8% Required: 1. Prepare the appropriate entries for Antonescu Sporting Goods (lessee) on January 1, 2016, and December 31, 2016. Round to nearest dollar. 2. Prepare the appropriate entries for Chapman Industries (lessor) on January 1, 2016, and December 31, 2016. Round to nearest dollar.

Question

The Antonescu Sporting Goods leased equipment from Chapman Industries on January 1, 2016. The agreement causes the lessee to obtain “control” of the leased asset. Chapman Industries had manufactured the equipment at a cost of $800,000. Its cash selling price and fair value is $1,000,000. Other Information: Lease term 4 years Annual payments $279,556 beginning Jan.1, 2016, and at Dec. 31, 2016, 2017, and 2018 Life of asset 4 years Rate the lessor charges 8% Required: 1. Prepare the appropriate entries for Antonescu Sporting Goods (lessee) on January 1, 2016, and December 31, 2016. Round to nearest dollar. 2. Prepare the appropriate entries for Chapman Industries (lessor) on January 1, 2016, and December 31, 2016. Round to nearest dollar.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Indicate how the following items are recorded in theaccounting records in the current year of Corone...

A: The adjustments to be made to the accounting records of Coronet CO for the current year would be bas...

Q: What is comprehensive income? How does comprehensive income differ from net income? Where do compani...

A: Comprehensive income:Comprehensive income represents the amount of net income plus other comprehensi...

Q: Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed m...

A: The correct answer is $464,120.

Q: What quantitative materiality tests are applied to determine whether a segment is significant enough...

A: Explain the quantitative materiality tests that are applied to determine whether a segment is signif...

Q: Units of production data for the two departments of Atlantic Cable and Wire Company for July of the ...

A: Equivalent units of production refer to the work done on the units at the end of an accounting perio...

Q: What are the major sources of cash (inflows) in a statement of cash flows? What are the major uses (...

A: the major sources of cash (inflows) in a statement of cash flows

Q: Cost-plus and market-based pricing. Georgia Temps, a large labor contractor, supplies contract labor...

A: Requirement 1:Determine the Labor price per hour.

Q: When a corporation acquires its own shares, those shares assume the same status as authorized but un...

A: Retired shares:Buy back of shares from the shareholders by paying cash and obtaining the status of “...

Q: On January 3, 2018, Matteson Corporation acquired 40 percent of the outstanding common stock of O'To...

A: Equity method: Equity method is the method used for accounting equity investments which claim a sign...

Q: The following information was described in a note of Canon ­Packing Co. “During August, Holland Prod...

A: Disclosures: The additional information which is attached to the entity's financial statements and u...

Q: Black Diamond Inc. issues 2,500 shares of $1 par valuecommon stock and 1,000 shares of $50 par value...

A: a. Prepare journal entries for issuance of common shares and preferred shares when market value of s...

Q: Mayfair Department Stores, Inc., operates over 30 retail stores in the Pacific Northwest. Prior to 2...

A: 1. Change in inventory methods:Change in inventory method is said to be the difference between the p...

Q: A small stock dividend decreases common stock. has no effect on total equity. increases Retained Ea...

A: A Stock Dividend is the payment of dividends in the forms of shares of the company. In cash crunch s...

Q: Why in franchise arrangements may it be improper torecognize the entire franchise fee as revenue at ...

A: Franchisor:   It is an organization or a sole proprietary that provides a franchise for the sale of ...

Q: Equipment replacement decisions and performance evaluation. Susan Smith manages the Wexford plant of...

A: 1.Calculate the operating income of the old and new machine.

Q: Journalizing a small stock dividend Element Water Sports has 13,000 shares of $1 par value common st...

A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in...

Q: What is par value?

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the liabi...

Q: Times-Roman Publishing Company reports the following amounts in its first three years of operation: ...

A: Click to see the answer

Q: Presently, the profession requires that earnings per share be disclosed on the face of the income st...

A: Financial statement: A record of financial activities and financial position of the company or an in...

Q: Explain the importance of a contract in the revenue recognitionprocess.

A: Click to see the answer

Q: The meaning of the term “fund” depends on the contextin which it is used. Explain its meaning when u...

A: If the fund is a noun: Fund is termed as the contribution of money or an account created by the empl...

Q: You are the newest member of the staff of Brinks & Company, a medium-size investment management ...

A: Share issue cost: Cost such as legal fee, promotional charge, and accounting services incurred for t...

Q: Global Air Inc. recently hired a new accountant with limitedreal-world experience in corporate accou...

A: Stock: A kind of investment that are made by the investors, in order to get more returns is referred...

Q: Conn Co. reported a retained earnings balance of $400,000 at December 31, 2015. In August 2016, Conn...

A:  

Q: What is the indirect effect of a change in accounting principle?Briefly describe the reporting of th...

A: Change in an accounting principle: This change occurs when a company decides to change from an accou...

Q: Broussard Company reported net income of $3.5 million in 2020. Depreciation for the year was $520,00...

A: A Cash flow statement is a financial statement that provides the summarised information regarding ca...

Q: A Type A lease agreement calls for annual lease payments of $26,269 over a six-year lease term, with...

A: Finance lease Sales type/Finance lease in parallel type of direct financing whereby the owner (lesso...

Q: State how each of the following items is reflected in thefinancial statements.(a) Change from FIFO t...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: On January 1, 2013, Ameen Company purchased a building for $36 million. Ameen uses straight-line dep...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: What are the major advantages of notes to the financialstatements? What types of items are usually r...

A: Notes to financial statements can be the information which is left out from the balance sheet and in...

Q: Analyzing and journalizing bond transactions On January 1, 2018, the Doctors Credit Union (DCU) issu...

A: Requirement 1:If the market interest rate is 5% when DCU issues its 7% bonds, the bonds will be pric...

Q: National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January...

A: 1.Calculation of price of the bonds for the Company N as on 1st January 2016 as shown below:

Q: For 2015, Pac Co. estimated its two-year equipment warranty costs based on $100 per unit sold in 201...

A: Changes in estimate:When a company revises its previous estimates, the changes in estimates are acco...

Q: Product mix, constrained resource. Wechsler Company produces three products: A130, B324, and C587. A...

A: 1.

Q: Computing earnings per share HEB Corporation had net income for 2018 of $60,450. HEB had 15,500 shar...

A: Earnings per share: Earnings per share represent the amount of income earned per share of outstandin...

Q: White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat ...

A: Process costs It is a method of cost accounting, which is used where the production is continuous, a...

Q: The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are foo...

A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in...

Q: There are two basic accounting approaches to reporting accounting changes. What are they?

A: Accounting changes: Accounting changes are the alternations made to the accounting methods, accounti...

Q: The Peridot Company purchased machinery on January 2, 2014, for $800,000. A five-year life was estim...

A: Accounting ChangesAccounting changes are the alterations made to the accounting methods, accounting ...

Q: Adams Moving and Storage, a family-owned corporation, declared a property dividend of 1,000 shares o...

A: Prepare journal entry to record the gain (loss) on investment at the date of declaration of property...

Q: Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are...

A: Formulas for the below given table:

Q: Mandatorily redeemable preferred stock (preference shares) is reported among liabilities and their d...

A: International Financial Reporting Standards:They are commonly known as IFRS. It is a set of accounti...