On January 1, 2014, Ryan Animation Ltd., which uses IFRS, sold a truck to Letourneau Finance Corp.

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On January 1, 2014, Ryan Animation Ltd., which uses IFRS, sold a truck to Letourneau Finance Corp. for $65,000 and immediately leased it back. The truck was carried on Ryan Animation's books at $53,000, net of $26,000 of accumulated depreciation. The term of the lease is five years, and title transfers to Ryan Animation at lease end. The lease requires five equal rental payments of $17,147, with each payment made at year end. The appropriate rate of interest is 10%, and the truck has a useful life of five years with no salvage value. Prepare Ryan Animation's 2014 journal entries.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Intermediate Accounting

ISBN: 978-1118300855

10th Canadian Edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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