25 4 points eBook Print References Western Soya Co. for a noncancelable stated lease term of four years ending December 31, 2025, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost $280,000 to manufacture and has an expected useful life of six years. Its normal sales price is $322,446. The expected residual value of $40,000 at December 31, 2025, is not guaranteed. Western Soya Co. is reasonably certain to exercise a purchase option on December 30, 2024, at an option price of $10,000. Equal payments under the lease are $117,000 (including $4,000 annual maintenance costs) and are due on December 31 of each The first year. payment was made on December 31, 2021. Western Soya's incremental borrowing rate is 10%. Western Soya knows the interest rate implicit in the lease payments is 8%. Both companies use straight-line amortization. Hint: A lease term ends for accounting purposes when an option becomes exercisable if it's expected to be exercised (i.e., a BPO). (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Show how Rhone-Metro calculated the $117,000 annual lease payments. 2. How should this lease be classified (a) by Western Soya Co. (the lessee) and (b) by Rhone-Metro Industries (the lessor)? 3. Prepare the appropriate entries for both Western Soya Co. and Rhone-Metro on December 31, 2021. 4. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee and the lessor. 5. Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 31, 2022 (the second rent payment and amortization). 6. Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 30, 2024, assuming the purchase option is exercised on that date. Chec Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Lessor Lessor Lessee Lessee Lessee Required 5 Lessor Required 6 Required 6 Lessee Lessor 4 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessor Lessee Lessor Lessee Lessor Lessee Lessor Lessee Show how Rhone-Metro calculated the $117,000 annual lease payments. (Round your intermediate and final answers to nearest whole dollar.) 25 25 points BPO Price Table or calculator function: eBook Print References Amount to be recovered Amount to be recovered through periodic lease payments Lease Payments Table or calculator function: Lease payments at the beginning of each of three years: Lease payments including executory costs n = Present Value Lease Payments 4 Complete this question by entering your answers in the tabs below. 25 points eBook Print Required 1 Required 2 Required 3 Required 3 Lessee Lessor Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor How should this lease be classified (a) by Western Soya Co. (the lessee) and (b) by Rhone-Metro Industries (the lessor)? (Round your intermediate and final answers to nearest whole dollar.) References Western Soya Co. Rhone-Metro Industries < Required 1 Required 3 Lessee 4 Required 1 Required 2 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) eBook View transaction list 23 Print References Journal entry worksheet 1 2 Record lease in the books of lessee. Note: Enter debits before credits. Date December 31, 2021 General Journal Debit Credit 4 Required 1 Required 2 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) eBook Print References View transaction list Journal entry worksheet < 1 NEW Record cash payment in the books of lessee. Note: Enter debits before credits. Date December 31, 2021 General Journal Debit Credit 4 Required 1 Required 2 25 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Rhone-Metro on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) View transaction list eBook Print Journal entry worksheet References < 1 2 Record lease in the books of lessor. Note: Enter debits before credits. Date December 31, 2021 General Journal Debit Credit A 4 Required 1 Required 2 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Rhone-Metro on December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) eBook Print View transaction list Journal entry worksheet References < 1 2 Record cash received in the books of lessor. Note: Enter debits before credits. Date December 31, 2021 General Journal Debit Credit 4 Required 1 Required 2 Required 3 Required 3 Required-4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessee- Lessor Lessor Lessee Lessor Lessee Lessor Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee. (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.) 25 points eBook Dec.31 Payments Print 2021 References 2021 2022 2023 2024 Lease Amortization Schedule Effective Decrease in Outstanding Interest Balance Balance +4 25 points Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessor. (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.) Lease Amortization Schedule Effective Decrease in Outstanding Interest Balance Balance eBook Dec.31 Payments Print 2021 References 2021 2022 2023 2024 25 4 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 31, 2022 (the second rent payment and amortization). (If is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calc Round your final answers to the nearest whole dollar amount.) points eBook Print References View transaction list Journal entry worksheet 1 2 3 Record amortization expense in the books of lessee. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit 4 Required 1 Required 2 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 31, 2022 (the second rent payment and amortization). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) View transaction list eBook Print References Journal entry worksheet 1 NE 3 Record maintenance expense in the books of lessee. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit 4 Required 1 Required 2 5 ints Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 31, 2022 (the second rent payment and amortization). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) View transaction list eBook Print Journal entry worksheet References < 1 2 Record cash payment in the books of lessee. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit > 25 4 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lesso Lessee Lessor Prepare the appropriate entries for Rhone-Metro on December 31, 2022 (the second rent payment and amortization). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) points eBook Print References View transaction list Journal entry worksheet 1 Record cash received in the books of lessor. Note: Enter debits before credits. Date December 31, 2022 General Journal Debit Credit 25 4 Required 1 Required 2 Required 3 Required 3 Lessee Lesson Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 30, 2024, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) points eBook Print References View transaction list Journal entry worksheet 1 2 3 4 5 Record amortization expense in the books of lessee. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit > 4 Required 1 Required 2 25 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessee Lessor Lessee Lessor Lessee Lessor Lessor Prepare the appropriate entries for Western Soya Co. on December 30, 2024, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) eBook View transaction list Print References Journal entry worksheet 3 4 5 Record cash payment for bargain purchase option only in the books of lessee. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit 4 Required 1 Required 2 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 30, 2024, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) eBook Print References View transaction list Journal entry worksheet < 1 2 M 4 5 Record maintenance expense in the books of lessee. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit A 25 4 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 30, 2024, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) points eBook View transaction list Print References Journal entry worksheet < 1 2 3 5 Record cash payment for executory costs only in the books of lessee. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit 25 4 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Western Soya Co. on December 30, 2024, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) points eBook Print References View transaction list Journal entry worksheet 1 2 3 4 G Record transfer of equipment ownership in the books of lessee. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit 4 Required 1 Required 2 25 points Required 3 Required 3 Required 4 Required 4 Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Lessee Lessor Lessee Lessor Prepare the appropriate entries for Rhone-Metro on December 30, 2021, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) eBook View transaction list Print References Journal entry worksheet 1 2 Record cash received for bargain purchase in the books of lessor. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit D 25 4 Required 1 Required 2 Required 3 Required 3 Required 4 Required 4 Lessee Lessor Lessee Lessor points eBook Required 5 Required 5 Required 6 Required 6 Lessee Lessor Lessee Lessor Prepare the appropriate entries for Rhone-Metro on December 30, 2021, assuming the purchase option is exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) View transaction list Print References Journal entry worksheet < 1 2 Record cash received for executory costs in the books of lessor. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit