BIU - DA.A. 23 Merge & Center $ -% 88-78 Conditional Formatas Cell Formatting Table Styles Styles lipboard Font Alignment Number 42 X 4 B D F G H E E21-12 (Accounting for an Operating Lease) On January 1, 2015, Secada Co. leased a building to Ryker Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10.pears. 2. The leased building cost 3,600,000 and was purchased for cash on January 1, 2015. 5 0 1 2 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no residual value. 4. Lease payments are 220,000 per year and are made at the end of the year. 5. Property tax expense of 85,000 and insurance expense of 10,000 on the building were incurred by Secada in the first year. Payment on these two items was made at the end of the year. 6. Both the lessor and the lessee are on a calendar-year basis. Instructions (a) Prepare the journal entries that Secada Co. should make in 2015. (b) Prepare the journal entries that Ryker Inc. should make in 2015. (c) If Secada paid 30,000 to a real estate broker on January 1, 2015, as a fee for finding the lessee, how much should be reported as an expense for this item in 2015 by Secada Co.? 3 4 5 6 Case 1 Case 2 Type here to search