Subzero Warehouse, Inc. leased equipment from Northern Finance on January 1, 2021. The lease is a...
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Subzero Warehouse, Inc. leased equipment from Northern Finance on January 1, 2021. The lease is a finance lease, the term is 8 years, and the lease requires equal rental payments of $44,206.25 at the beginning of each year. The equipment has an estimated useful life of 8 years, and no salvage value. Northern Finance uses an interest rate of 5% to determine lease payments. The table below provides select present/future value factors. 0.67684 Present Value of a Single Sum (5%,8) Present Value of an Annuity Due (5%,8) 6.78637 Present Value of an Ordinary Annuity (5%,8) 6.46321 Future Value of a Single Sum (5%,8) 1.47746 Future Value of an Ordinary Annuity (5%,8) 9.54911 What is the journal entry required by Subzero Warehouse on January 1, 2021 to record the lease? Subzero Warehouse, Inc. leased equipment from Northern Finance on January 1, 2021. The lease is a finance lease, the term is 8 years, and the lease requires equal rental payments of $44,206.25 at the beginning of each year. The equipment has an estimated useful life of 8 years, and no salvage value. Northern Finance uses an interest rate of 5% to determine lease payments. The table below provides select present/future value factors. 0.67684 Present Value of a Single Sum (5%,8) Present Value of an Annuity Due (5%,8) 6.78637 Present Value of an Ordinary Annuity (5%,8) 6.46321 Future Value of a Single Sum (5%,8) 1.47746 Future Value of an Ordinary Annuity (5%,8) 9.54911 What is the journal entry required by Subzero Warehouse on January 1, 2021 to record the lease?
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To record the finance lease transaction on January 1 2021 Subzero Warehous... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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