[38] The amount to be recorded as depreciation expense for 2019 if the residual value was guaranteed by the lessee would be [Round to the nearest dollar]

a.

$23,915.

b.

$15,943.

c.

$17,333.

d.

$22,648.

e.

$25,991.

[39] Working with the assumptions that the residual value was guaranteed by the lessee and that you are now at January 1, 2029. On that date, the fair market value of the equipment was determined to be $9,450. The required journal entry/entries prepared by WIN, to record all the effects of the lease ending would be

a.

DEBIT-Accumulated Depreciation - Leased Asset [$226,479]; DEBIT-Loss on Return of Leased Asset [$14,150]; DEBIT-Interest Payable [$1,748]; DEBIT Obligation Under Capital Lease [$21,852]; CREDIT-Right of Use Assets [$250,079]; CREDIT-Cash [$14,150].

b.

DEBIT-Loss On Return Of Leased Asset [$14,150]; CREDIT-Cash [$14,150].

c.

DEBIT-Obligation Under Capital Lease [$250,079]; DEBIT-Loss on Return of Leased Asset [$14,150]; CREDIT-Right of Use Assets [$250,079]; CREDIT-Cash [$14,150].

d.

DEBIT-Obligation Under Capital Lease [$21,852]; CREDIT-Right of Use Assets [$7,702]; CREDIT-Cash [$14,150].

e.

No journal entry required.

Not Ordinary Drones (NOD), Inc., a lessor, leased a drone to Worldz Information Network, Ltd., [WIN], a lessee, on January 1, 2019. The following information relates to the leased asset and the lease agreement: Fair value of leased drone $Undisclosed Lease 10 years Useful life 15 years Payment Due January 1 Payment frequency Annual Annual Instalments starting January 1, 2019 $33,000 Estimated residual value at end of the lease, [as stated in the problem] $23,600 Interest rate implicit in the lease (unknown to the lessee] 7% Interest rate incremental to the lessee 8% Ownership of drone reverts to lessor at end of lease term Year end for both companies December 31 Amortization method Straight line Accounting standards used - NOD ASPE - WIN IFRS REQUIRED: Select the one best answer to each of the questions listed below and input it in the computer