Chapter 21, Problem 9ICA

Fields Finance Ltd. (FFL), a leasing company that reports under ASPE, is in the process of preparing its financial statements for the year ended June 30, Year 1. The following leases were entered into: Lease 1: On February 1, Year 1, the company entered into a lease contract in respect of plant and machinery for a production line. The details are as follows: 12 quarterly rental payments $ 11,000 (first payment on April 30, Year 1) Period of contract 3 years (from February 1, Year 1) $200,000 Fair value of equipment (cost to FFL) Guaranteed residual value – end of lease $ 60,000 term Estimated residual value – end of useful $ 20,000 life Economic life 8 years 12% Implicit rate Lease 2: On April 1, Year 1, the company entered into a lease contract in respect of a fleet of distribution vehicles. This lease involves the following payments: Initial rental payment 10 quarterly rental payments Period of contract Fair value of equipment (cost to FFL) $190,000 Unguaranteed residual value – end…

The following events occurred during the first half of the year. Book the entries necessary for the corresponding transactions that have occurred. How do I make Journal entries for these line items? May 1: A new long-term lease is entered into for a much larger corporate office which will house the company and its future acquired company. The net present value of the future lease payments is $510,800. The lease is for six years. June 30: Book the amortization for the first half of the year on the right-of-use leased asset from May 1.

Required Information [The following information applies to the questions displayed below.] A company incurred the following transactions: a. Recorded the financing (capital) lease of a truck. The present value of the lease payments is $68,000; the total of the lease payments to be made is $81,000. b. Recorded the company's payroll for the month. Gross pay was $7,800, net pay was $5,400, and various withholding liability accounts were credited for the difference. c. Issued $24,000 of bonds payable at a price of 103. d. Adjusted the estimated liability under a warranty program by reducing previously accrued warranty expense by $4,500. e. Retired $14,000 face amount of bonds payable with a carrying value of $13,500 by calling them at a redemption value of 101. f. Accrued estimated annual health care costs for retirees: $19,500 is expected to be paid within a year, and $158,000 is expected to be paid in more than a year. Required: a-1. Show the effect, if any, of each…