Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021.

image text in transcribed

image text in transcribed

image text in transcribed

American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 11\%. IFV 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. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. \& 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. Complete this question by entering your answers in the tabs below. Prepare the journal entry for American Food Services at the beginning of the lease on January 1,2021 . (Enter your answers in whole dollars and not in millions. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Complete this question by entering your answers in the tabs below. Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollars and not in millions. Round your answers to the nearest whole dollar. Enter all amounts as positive values.) Prepare the appropriate entries related to the lease on December 31,2021 and 2023 . (If no entry is required for a tiansactio select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions. Round you intermediate and final answers to the nearest whole dollar.)

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

Auditing Assurance And Risk

Authors: W. Robert Knechel, Steve Salterio, Brian Ballou

2rd Edition

0324022131, 978-0324022131

More Books

Students also viewed these Accounting questions

Question

Does it avoid use of underlining?

Answered: 1 week ago