James Morrison Corporation leases new equipment on December 31, 2010. The lease transfers ownership of the equipment
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James Morrison Corporation leases new equipment on December 31, 2010. The lease transfers ownership of the equipment to James Morrison at the end of the lease. The present value of the lease payments is $192,000. After recording this lease, James Morrison has assets of $1,800,000, liabilities of $1,100,000, and stockholders’ equity of $700,000.
(a) Prepare the entry to record the lease, and
(b) Compute and discuss the debt to total assets ratio at year-end.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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a Leased Asset x Equipment 192000 Lease Liability 192000 To record leased ...View the full answer
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Related Book For 
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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