assume instead there was no option to purchase that $8.60 million represents the buildings' value on June 29 2023 and that the lease term was 12 years
Assume instead that there was no option to purchase, that $8.60 million represents the building's fair value on June 29,2023 , and that the lease term was 12 years. Prepare all entries for Crane Central from June 29, 2023, to December 31, 2024. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the The head office of Crane Central Ltd. has operated in the western provinces for almost 50 years. Crane Central uses ASPE. In 2007, new offices were constructed on the same site at a cost of $9.70 million. The new building was opened on January 4, 2008, and was expected to be used for 35 years, at which time it would have a value of approximately $2.20 million. In 2023, as competitors began to consider merger strategies among themselves, Crane Central felt that the time was right to expand the number of its offices throughout the region. This plan required significant financing and, as a source of cash, Crane Central looked into selling the building that housed its head office. On June 29, 2023, Rural Life Insurance Ltd. purchased the building (but not the land) for $8.60 million and immediately entered into a 20 -year lease with Crane Central to lease back the occupied space. The terms of the lease were as follows: , purchase the building at the end of the lease for $1 million. e on June 29 each year, beginning on June 29, 2023. 10% on its net investment in the lease, the same as Crane Central's incremental borrowing rate. tenance, insurance, and property taxes. alue have not changed significantly since 2004. Straight-line depreciation is used by Crane Central. Click here to view the factor table PRESENT VALUE OF 1. 1. It is non-cancellable, with an option to purchase the building at the end of the lease for $1 million. 2. The annual rental is $902,449, payable on June 29 each year, beginning on June 29,2023 . 3. Rural Life expects to earn a return of 10% on its net investment in the lease, the same as Crane Central's incremental borrowing rate. 4. Crane Central is responsible for maintenance, insurance, and property taxes. 5. Estimates of useful life and residual value have not changed significantly since 2004. Straight-line depreciation is used by Crane Central. Assume instead that there was no option to purchase, that $8.60 million represents the building's fair value on June 29,2023 , and that the lease term was 12 years. Prepare all entries for Crane Central from June 29, 2023, to December 31, 2024. (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the The head office of Crane Central Ltd. has operated in the western provinces for almost 50 years. Crane Central uses ASPE. In 2007, new offices were constructed on the same site at a cost of $9.70 million. The new building was opened on January 4, 2008, and was expected to be used for 35 years, at which time it would have a value of approximately $2.20 million. In 2023, as competitors began to consider merger strategies among themselves, Crane Central felt that the time was right to expand the number of its offices throughout the region. This plan required significant financing and, as a source of cash, Crane Central looked into selling the building that housed its head office. On June 29, 2023, Rural Life Insurance Ltd. purchased the building (but not the land) for $8.60 million and immediately entered into a 20 -year lease with Crane Central to lease back the occupied space. The terms of the lease were as follows: , purchase the building at the end of the lease for $1 million. e on June 29 each year, beginning on June 29, 2023. 10% on its net investment in the lease, the same as Crane Central's incremental borrowing rate. tenance, insurance, and property taxes. alue have not changed significantly since 2004. Straight-line depreciation is used by Crane Central. Click here to view the factor table PRESENT VALUE OF 1. 1. It is non-cancellable, with an option to purchase the building at the end of the lease for $1 million. 2. The annual rental is $902,449, payable on June 29 each year, beginning on June 29,2023 . 3. Rural Life expects to earn a return of 10% on its net investment in the lease, the same as Crane Central's incremental borrowing rate. 4. Crane Central is responsible for maintenance, insurance, and property taxes. 5. Estimates of useful life and residual value have not changed significantly since 2004. Straight-line depreciation is used by Crane Central
