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Intermediate Accounting: Reporting...
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Intermediate Accounting: Reporting...
Use the information in RE20-1. Prepare the journal entry that Keller Corporation would make during the first year of the lease assuming that the lease is classified as an operating lease.
Prepare the journal entries for the transactions during the first year of lease.
Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.
Prepare the journal entries for the transactions during the first year of lease:
| Date | Accounts title and Explanation | Debit ($) | Credit ($) |
| Â | Right-of-use asset | $58,684.19 | Â |
| Â | Â Â Â Â Lease liability | Â | $48,684.19 |
| Â | Â Â Â Â Cash | Â | $10,000 |
| Â | (To record right-to-use and lease liability) | Â | Â |
| Â | Â | Â | Â |
| Â | Lease expenses | $10,000 | Â |
| Â | Â Â Â Â Lease liability | Â | $4,868... |
Chapter 20 Solutions
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