On January 1, 2023, Animation Ltd., which uses ASPE, sold a truck to Letourneau Finance Corp. for
Question:
On January 1, 2023, Animation Ltd., which uses ASPE, sold a truck to Letourneau Finance Corp. for $65,000 and immediately leased it back. The truck was carried on 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 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 Animation’s 2023 journal entries including any year-end adjusting entries at December 31, 2023.
Step by Step Answer:
Cash Accumulated Depreciation Vehicles Vehicles 53000 26000 Deferred P...View the full answer
Intermediate Accounting Volume 2
ISBN: 9781119740445
13th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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