Problem $15-5($Algo$)$ Lessee; operating lease; advance payment; leasehold improvement $[$L$015-4]$

On January $1,2024,$ Winn Heat Transfer leased office space under a three$-$year operating lease agreement. The arrangement

specified three annual lease payments of $$102,000$ each, beginning December $31,2024,$ and on each December $31$ through $2026.$

The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of $5\%.$ Winn also paid a $$213,000$ advance

payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before

occupying the space at a cost of $$315,000.$ The useful life of the building and the structural modifications were estimated to be $30$

years with no residual value.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Required:

Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of $2026.$ Winn's fiscal year is

the calendar year.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Round your

answers to the nearest whole dollar.

Journal entry worksheet

$1$

$2$

$3$

$4$

$5$

$6$

$7$

$8$

Record the beginning of the lease for Winn.

Note: Enter debits before credits.