Assume that IBM leased equipment that was carried at a cost of $129,000 to Sheridan Company....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume that IBM leased equipment that was carried at a cost of $129,000 to Sheridan Company. The term of the lease is 5 years beginning December 31, 2024, with equal rental payments of $30,600 beginning December 31, 2024. The fair value of the equipment at commencement of the lease is $129,735. The equipment has a useful life of 5 years with no salvage value. The lease has an implicit interest rate of 9%, no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable. Prepare IBM's December 31, 2024, journal entries at commencement of the lease. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g. 5,275.) Click here to view factor tables. Date December 31, 2024 Account Titles and Explanation Cost of Goods Sold Lease Receivable Sales Revenue (To record the lease) December 31, 2024 Cash Lease Receivable (To record receipt of lease payment) Debit Credit 30600 30600 Assume that IBM leased equipment that was carried at a cost of $129,000 to Sheridan Company. The term of the lease is 5 years beginning December 31, 2024, with equal rental payments of $30,600 beginning December 31, 2024. The fair value of the equipment at commencement of the lease is $129,735. The equipment has a useful life of 5 years with no salvage value. The lease has an implicit interest rate of 9%, no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable. Prepare IBM's December 31, 2024, journal entries at commencement of the lease. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g. 5,275.) Click here to view factor tables. Date December 31, 2024 Account Titles and Explanation Cost of Goods Sold Lease Receivable Sales Revenue (To record the lease) December 31, 2024 Cash Lease Receivable (To record receipt of lease payment) Debit Credit 30600 30600
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Tropik bir hastal a yakalanan bir ki inin bu hastal ktan kurtulma olas l , t m iyile me olas l klar n n e it ve birbirinden ba ms z oldu u kabul ile 0 . 8 ' dir. Buna g re , hastal a yakalanan 1 0 ki...
-
Analysis of receivables method At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful Accounts has a credit balance of $7,000; and sales for the year...
-
Assume that IBM leased equipment that was carried at a cost of $172,000 to Cullumber Company. The term of the lease is 6 years December 31, 2019, with equal rental payments of $35,176 beginning...
-
If the Albany highway system described in Problem 29 has revised flow capacities as shown in the following network, what is the maximal flow in vehicles per hour through the system? How many vehicles...
-
What are the four basic organizational structures? Which one is evident at Irving?
-
Air is compressed steadily by a 5-kW compressor from 100 kPa and 17°C to 600 kPa and 167°C at a rate of 1.6 kg/min. During this process, some heat transfer takes place between the compressor...
-
Describe four ways for a company to deal with risk.
-
The chart of accounts of Sabre Company includes the following selected accounts. 112 Accounts Receivable 401 Sales Revenue 120 Inventory 412 Sales Returns and Allowances 126 Supplies 505 Cost of...
-
In your own words: What is the impact on a transferor if a Section 351 exchange involves the assumption of the shareholders liabilities by the corporation? Explain fully, including all exceptions and...
-
Which series has the highest beta. BraveNewCoin Liquid Index for Bitcoin 1D BNC Trading Brave Ne Yellow Green Blue Orange
-
Kyndal wants to buy a lamp that originally cost $82, but went on sale for 20% off. The store is having an additional sale that is 40% off the sale price. What is the price of the lamp? Enter
-
Calculate what the stock of a toy company by the name of Peter Rabbit Union should be selling for if the company just paid $4.70 per share in dividends, and the dividends are expected to grow at a...
-
Earthquakes generate sound waves inside Earth. Unlike a gas, Earth can experience both transverse (S) and longitudinal (P) sound waves. Typically, the speed of S waves is about 4.73 km/s, and that of...
-
Niantic reported the following financial information (amounts in millions). Current assets. Total assets Current liabilities Net sales Net Income $ 9,000 12,477 1,000 5,400 226 Compute the current...
-
What are the key challenges and opportunities associated with distributed leadership models in decentralized organizational structures, and how can leaders optimize team autonomy while ensuring...
-
A mass of 0.42 kg is attached to a spring and set into oscillation on a horizontal frictionless surface. The simple harmonic motion of the mass is described by x(t) = (0.22 m)cos[(10 rad/s)t]....
-
OBFW Publishers Consider the event that the randomly selected student is an undergraduate student an Write this event in symbolic form and find its probability. OP (GC UM) = 0.30 OP (GC UM) = 0.77 O...
-
The outer loop controls the number of students. Note that the inner loop of this program is always executed exactly three times, once for each day of the long weekend. Modify the code so that the...
-
The group Lagardre states in its annual report that the rate used to measure the cost of capital is the discount rate which is equal to the flow of net future dividends (excluding tax credits) at the...
-
What does the theory of options contribute to the valuing of an investment?
-
Is the theory of options opposed to the theory of efficient markets?
Study smarter with the SolutionInn App