On January 1, 20X1, Walker, Inc., signs a 5-year lease for two floors of a 20-floor building.
Question:
On January 1, 20X1, Walker, Inc., signs a 5-year lease for two floors of a 20-floor building. The building has an expected remaining life of 20 years. The space is available immediately, and Walker agrees to make annual payments of $325,000 on December 31 of each year. The lease contains no renewal or purchase options. The implicit rate in the lease is 7%.
Required:
1. What journal entry would Walker prepare on January 1, 20X1?
2. Compute and label the amounts that would be shown on Walker’s income statement, balance sheet, and statement of cash flows for the year ended December 31, 20X1.
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Step by Step Answer:
Requirement 1 Initial entry Under ASC 842 this would be an operating lease Walker would make the following journal entry DR Rightofuse asset 1332565 C...View the full answer
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Related Book For 
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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