Accounting Problem Instructions Fill in the missing values on Question 5 png, Use the List of Accounts below List of Accounts Accounts Payable Accounts Receivable Accumulated Depreciation Leased Buildings Accumulated Depreciation Buildings Accumulated Depreciation Leased Equipment Accumulated Depreciation Rental Equipment Accumulated Depreciation Right of Use Asset Accumulated Depreciation Software under Lease Accumulated Depreciation Vehicles Accumulated Depreciation Vehicles under Lease Amortization Expense Buildings Buildings under Lease Cash Cost of Goods Sold Deferred Profit on Sale Leaseback Depreciation Expense Equipment Equipment Acquired for Lessee Equipment under Lease Insurance Expense Insurance Payable Insurance Revenue Interest Expense Interest Income Interest Payable Interest Receivable Inventory Land Rental Expense Land under Lease Lease Liability Lease Receivable Legal Expense Loss on Lease Low Value Lease Expense No Entry Obligations under Lease Operating Expenses Prepaid Expenses Prepaid Insurance Prepaid Rent Property Tax Expense Rent Expense Rental Equipment Rent Payable Rent Receivable Rent Revenue Repairs and Maintenance Expense Right of Use Asset Sales Revenue Selling Expenses Short Term Lease Expense Software under Lease Unearned Interest Income Unearned Rent Revenue Vehicles Vehicles under Lease Question 5 png Pharoah Corp agreed to lease property from Bonita Corp effective January 1, 2020, for an annual payment of $25,592, beginning January 1, 2020 The property is made up of land with a fair value of $108,000 and a two storey office building with a fair value of $166,000 and a useful life of 25 years with no residual value The implicit interest rate is 9 , the lease term is 25 years, and title to the property will not be transferred to Pharoah by the end of the lease term Assume that there is also no bargain purchase option, but that the lease does meet other criteria to qualify as a capital lease Both Pharoah and Bonita use ASPE Prepare the required entries made by Pharoah Corp on January 1, 2020, and at its year end of December 31, 2020 (Credit account titles are automatically indented when the amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts Round answers to O decimal places, e g 5,275 ) Date Account Titles and Explanation Debit Credit Jan 1 Buildings under Lease Obligations under Lease (To record inception of lease ) Jan 1 Obligations under Lease Rent Expense Cash 25592 (To record first lease payment ) Dec 31 Interest Expense Obligations under Lease (To record interest ) Dec 31 v Depreciation Expense 6640 Accumulated Depreciation Leased Buildings 6640 (To record depreciation expense )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 28, 2024

Accounting Problem Instructions Fill in the missing values on Question 5.png, Use the List of Accounts below. List of Accounts Accounts Payable Accounts Receivable Accumulated

Accounting Problem

Instructions

Fill in the missing values on Question 5.png, Use the List of Accounts below.

List of Accounts

Accounts Payable
Accounts Receivable
Accumulated Depreciation - Leased Buildings
Accumulated Depreciation - Buildings
Accumulated Depreciation - Leased Equipment
Accumulated Depreciation - Rental Equipment
Accumulated Depreciation - Right-of-Use Asset
Accumulated Depreciation - Software under Lease
Accumulated Depreciation - Vehicles
Accumulated Depreciation - Vehicles under Lease
Amortization Expense
Buildings
Buildings under Lease
Cash
Cost of Goods Sold
Deferred Profit on Sale-Leaseback
Depreciation Expense
Equipment
Equipment Acquired for Lessee
Equipment under Lease
Insurance Expense
Insurance Payable
Insurance Revenue
Interest Expense
Interest Income
Interest Payable
Interest Receivable
Inventory
Land Rental Expense
Land under Lease
Lease Liability
Lease Receivable
Legal Expense
Loss on Lease
Low Value Lease Expense
No Entry
Obligations under Lease
Operating Expenses
Prepaid Expenses
Prepaid Insurance
Prepaid Rent
Property Tax Expense
Rent Expense
Rental Equipment
Rent Payable
Rent Receivable
Rent Revenue
Repairs and Maintenance Expense
Right-of-Use Asset
Sales Revenue
Selling Expenses
Short-Term Lease Expense
Software under Lease
Unearned Interest Income
Unearned Rent Revenue
Vehicles
Vehicles under Lease

Question 5.png

Pharoah Corp. agreed to lease property from Bonita Corp. effective January 1, 2020, for an annual payment of $25,592, beginning January 1, 2020. The property is made up of land with a fair value of $108,000 and a two-storey office building with a fair value of $166,000 and a useful life of 25 years with no residual value. The implicit interest rate is 9%, the lease term is 25 years, and title to the property will not be transferred to Pharoah by the end of the lease term. Assume that there is also no bargain purchase option, but that the lease does meet other criteria to qualify as a capital lease. Both Pharoah and Bonita use ASPE. Prepare the required entries made by Pharoah Corp. on January 1, 2020, and at its year end of December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 Buildings under Lease Obligations under Lease (To record inception of lease.) Jan. 1 Obligations under Lease Rent Expense Cash 25592 (To record first lease payment.) Dec 31 Interest Expense Obligations under Lease (To record interest.) Dec 31 v Depreciation Expense 6640 Accumulated Depreciation - Leased Buildings 6640 (To record depreciation expense.)