Windsor Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $41,100 each, beginning December 31, 2019. In addition, Windsor guarantees the lessor a residual value of $18,400 at the end of the lease. However, Windsor believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years. Prepare Windsors' December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Windsor.
Windsor Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $41,100 each, beginning December 31, 2019. In addition, Windsor guarantees the lessor a residual value of $18,400 at the end of the lease. However, Windsor believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years. Prepare Windsors' December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Windsor.
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 10GI: Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6...
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Windsor Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $41,100 each, beginning December 31, 2019. In addition, Windsor guarantees the lessor a residual value of $18,400 at the end of the lease. However, Windsor believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years.
Prepare Windsors' December 31, 2019,
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