Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A18-6 Lessee Accounting; Amortization Table and Entries: (LO 18-3) On 31 December 20xo. Columbia Inc. entered into an agreement with Scotia Ltd. to lease equipment

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
A18-6 Lessee Accounting; Amortization Table and Entries: (LO 18-3) On 31 December 20xo. Columbia Inc. entered into an agreement with Scotia Ltd. to lease equipment with a useful life of 6 years. Columbia Inc. will make fout equal payments of $102,000 at the beginning of each lease year, Columbia Inc. anticipates that the equipment will have a residual value of $81600 at the end of the lease.net of removal costs. Columbia Inc. has the option of extending the lease by paying $81,600 to retain the equipment or (2) allowing Scotia Ltd. to remove it Scotia Lid's implicit interest rate in this lease is 9%. Columbia Ine's incremental borrowing rate is 10% Columbia Inc deprecates the leased equipment on a straight line basis. The lease commences on 1 January 20X1. Assume that the fair value of the equipment on the open market is greater than the present value of the lease payments. (PVOL 51. PVA of $1, and PVAD OLS1) (Use appropriate foctor(s) from the tobles provided.) Required: 1. Prepare a lease ability amortization table for this lease for Columbia Inc. (Round your final answers to the nearest whole della amount. Leave no cell blank. Be certain to enter "o" wherever required.) Lease Period Beginning Balance Amortization Table Netense Interest Payment ftog of Year Increce) in Balance Ending balance 20x1 20X2 20x3 20X4 Journal entry worksheet Record the commencement of lease. Note: Enter debits before credits Date General Journal Debit Credit 1 Jan 20X1 Record entry Clear entry View general Journal Journal entry worksheet co Record the payment of 2nd lease installment. Note: Enter debits before credits. Date General Journal Debit Credit 1 Jan. 20X2 Record entry Clear entry View general journal Journal entry worksheet Record the interest expense. Note: Enter debits before credits. Date General Journal Debit Credit 31 Dec. 20X2 Record entry Clear entry View general Journal %252Fnewconnect.mheduca ssignment Saved Journal entry worksheet

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Quality Auditing

Authors: Denis Pronovost

1st Edition

0873894766, 9780873894760

More Books

Students also viewed these Accounting questions