(Learning Objective 3: Recording Operating and Capital lease) Gary Pan Enterprises entered into two lease agreements for...

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(Learning Objective 3: Recording Operating and Capital lease) Gary Pan Enterprises entered into two lease agreements for 5 years on January 1, 20X0. Both leases require a payment of $10,000 per year at the end of each year. Lease 1 is structured as an operating lease whilst Lease 2 is structured as a capital lease with an implicit interest rate of 5%. Prepare all relevant journal entries for both leases on:

a. The day of signing the lease contract

b. The day of the fi rst lease payment

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Financial Accounting International Financial Reporting Standards

ISBN: 9780273777809

1st Global Edition

Authors: Walter T Harrison, Charles Horngren, Bill Thomas, Themin Suwardy

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