Analyzing. Interpreting and Capitalizing Operating Leases Nike, Inc. reports the following data concerning leases in its 2014 10-K. Note 14--Commitments and Contingencies The Company leases space for certain of its offices, warehouses and retail stores under leases expiring from 1 to 20 years after May 31, 2014. Amounts of minimum future annual rental commitments under noncancelable operating leases in each of the five years ending May 31, 2015 through 2019 are $427 million $399 million $366 million, 5311 million, 5251 million, respectively, and $1,050 million in later years. Required a. What adjustments) might you consider to Nike's balance sheet given this information and assuming that Nike's discount rate is 4%? Use a finanical calculator or Excel to compute. Do not round until your final answer. Round to the nearest whole number. Asset and liability Adjustments 0 b. Show how the amount computed in part a would be reported in the balance sheet using the financial statement effects template. Income Statement Balance Sheet Transaction Cash Asset . Noncash Assets - Liabilities Contrib. Capital - Earned Capital Revenue Expenses - Net Income To capitalize operating leases 5 0 3 0 - 5 5 0 + 0 - $ 503050 Prepare journal entries to record the capitalization of these operating leases at the end of fiscal 2014. What journal entries would be required to record lease payments and lease related expenses in 2015 if these leases were accounted for as capital leases? Assume straight-line depreciation and a ten-year life. Round your answers to the nearest dollar Debit Credit Description To cantare the leaves Oo oo To depreciate the assets To record the lease paymen d. Post the journal entries from partc to the appropriate T-accounts. Cash (A) Leased Asset (A) Accumulated Depreciation CXA) II 0 Lease Liability (L) Interest Expense (E) Depreciation Expense (E) 0 0 0 0 Analyzing, Interpreting, and Capitalizing Operating Leases Nike, Inc. reports the following data concerning leases in its 2014 10-K. Note 14--Commitments and Contingencies The Company leases space for certain of its offices, warehouses and retail stores under leases expiring from 1 to 20 years after May 31, 2014... Amounts of minimum future annual rental commitments under noncancelable operating leases in each of the five years ending May 31, 2015 through 2019 are 5427 million, 5399 million, 5366 million, $311 million, $251 million, respectively, and $1,050 million in later years. Required a. What adjustment(s) might you consider to Nike's balance sheet given this information and assuming that Nike's discount rate is 447 Use a finanical calculator or Excelto compute. Do not round until your final answer. Round to the nearest whole number, Asset and Liability Adjustment $ 0 b. Show how the amount computed in part a would be reported in the balance sheet using the financial statement effects template. Income Statement Transaction Cash Asset To capitale operating leases 5 0 Balance Sheet Noncash Assets Llabilities $ 0 - $ Contrib, Capital Earned Capital $ + + 0 - $ 0 - c. Prepare journal entries to record the capitalization of these operating leases at the end of fiscal 2014. What journal entries would be required to record lease payments and lease related expenses in 2015 if these leases were accounted for as capital leases? Assume straight-line depreciation and a ten-year life. Round your answers to the nearest dollar Description Debit Credit To cate the leaves OOOOOOO To depreciate the assets. 3 Lease liability To record the lease payment. Analyzing. Interpreting and Capitalizing Operating Leases Nike, Inc. reports the following data concerning leases in its 2014 10-K. Note 14--Commitments and Contingencies The Company leases space for certain of its offices, warehouses and retail stores under leases expiring from 1 to 20 years after May 31, 2014. Amounts of minimum future annual rental commitments under noncancelable operating leases in each of the five years ending May 31, 2015 through 2019 are $427 million $399 million $366 million, 5311 million, 5251 million, respectively, and $1,050 million in later years. Required a. What adjustments) might you consider to Nike's balance sheet given this information and assuming that Nike's discount rate is 4%? Use a finanical calculator or Excel to compute. Do not round until your final answer. Round to the nearest whole number. Asset and liability Adjustments 0 b. Show how the amount computed in part a would be reported in the balance sheet using the financial statement effects template. Income Statement Balance Sheet Transaction Cash Asset . Noncash Assets - Liabilities Contrib. Capital - Earned Capital Revenue Expenses - Net Income To capitalize operating leases 5 0 3 0 - 5 5 0 + 0 - $ 503050 Prepare journal entries to record the capitalization of these operating leases at the end of fiscal 2014. What journal entries would be required to record lease payments and lease related expenses in 2015 if these leases were accounted for as capital leases? Assume straight-line depreciation and a ten-year life. Round your answers to the nearest dollar Debit Credit Description To cantare the leaves Oo oo To depreciate the assets To record the lease paymen d. Post the journal entries from partc to the appropriate T-accounts. Cash (A) Leased Asset (A) Accumulated Depreciation CXA) II 0 Lease Liability (L) Interest Expense (E) Depreciation Expense (E) 0 0 0 0 Analyzing, Interpreting, and Capitalizing Operating Leases Nike, Inc. reports the following data concerning leases in its 2014 10-K. Note 14--Commitments and Contingencies The Company leases space for certain of its offices, warehouses and retail stores under leases expiring from 1 to 20 years after May 31, 2014... Amounts of minimum future annual rental commitments under noncancelable operating leases in each of the five years ending May 31, 2015 through 2019 are 5427 million, 5399 million, 5366 million, $311 million, $251 million, respectively, and $1,050 million in later years. Required a. What adjustment(s) might you consider to Nike's balance sheet given this information and assuming that Nike's discount rate is 447 Use a finanical calculator or Excelto compute. Do not round until your final answer. Round to the nearest whole number, Asset and Liability Adjustment $ 0 b. Show how the amount computed in part a would be reported in the balance sheet using the financial statement effects template. Income Statement Transaction Cash Asset To capitale operating leases 5 0 Balance Sheet Noncash Assets Llabilities $ 0 - $ Contrib, Capital Earned Capital $ + + 0 - $ 0 - c. Prepare journal entries to record the capitalization of these operating leases at the end of fiscal 2014. What journal entries would be required to record lease payments and lease related expenses in 2015 if these leases were accounted for as capital leases? Assume straight-line depreciation and a ten-year life. Round your answers to the nearest dollar Description Debit Credit To cate the leaves OOOOOOO To depreciate the assets. 3 Lease liability To record the lease payment