Provide all journal entries that Kelly K. inc. will record over the whole term of the lease.
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Provide all journal entries that Kelly K. inc. will record over the whole term of the lease.
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Kelly K. incenters a lease agreement for a piece of equipment with a fair value of $45,000 under a 5 year lease on december 20,2021. The lease commences on January 1, 2022 and Kelly will return the equipment on December 31,2026. The equipment has a useful life of 7 yrs. Kelly made a lease payment of 5,000 on dec. 20,2021. The following annual payments in addition to the dec. 20, 2021 payment are required: Implicit rate is 9% Kelly incurs initial direct costs of 2,000 prior to commencement Assume it is an Operating lease No purchase options, lease incentives, guaranteed residual value, or transfer of ownership. Dec 31 2020 Dec 31 2023 Dec 31 2024 Dec 31 2025 6000 5000 4000 3000 Kelly K. incenters a lease agreement for a piece of equipment with a fair value of $45,000 under a 5 year lease on december 20,2021. The lease commences on January 1, 2022 and Kelly will return the equipment on December 31,2026. The equipment has a useful life of 7 yrs. Kelly made a lease payment of 5,000 on dec. 20,2021. The following annual payments in addition to the dec. 20, 2021 payment are required: Implicit rate is 9% Kelly incurs initial direct costs of 2,000 prior to commencement Assume it is an Operating lease No purchase options, lease incentives, guaranteed residual value, or transfer of ownership. Dec 31 2020 Dec 31 2023 Dec 31 2024 Dec 31 2025 6000 5000 4000 3000
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Related Book For
Intermediate Accounting
ISBN: 978-0134730370
2nd edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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