Question
Eastern Edison Company leased equipment from Low-Tech Leasing on January 1, 2021. Low-Tech recently purchased the equipment at a cost of $213,369. Other information: Lease
Eastern Edison Company leased equipment from Low-Tech Leasing on January 1, 2021. Low-Tech recently purchased the equipment at a cost of $213,369.
| Other information: | ||
| Lease term | 3 years | |
| Annual payments | $ | 78,000 on January 1 each year |
| Life of asset | 3 years | |
| Fair value of asset | $ | 213,369 |
| Implicit interest rate | 10% | |
| Incremental rate | 10% | |
There is no expected residual value. Required: Prepare appropriate journal entries for Low-Tech Leasing for 2021. Assume a December 31 year-end.
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Auditing Concepts And Methods A Guide To Current Auditing Theory And Practice
Authors: Mcgraw-Hill
5th Edition
0070099995, 978-0070099999
