First, you will need to decide if the agreement is a lease agreement. Second, in addition to the journal entries, you must identify the Codification references that support the entries you recommend. Case 7.1 and 7.2 please.
Il guidance. guit unulate disposal cost of this asset? To CASE STUDY QUESTIONS year 220X1, tom 10 ando heese Ahead Frankie's Homemade Cheese Shop ("Frankie's") signed an advertising agreement with Simmons Boards ("Owner") for billboard advertising rights along Route 33 in the town of Hampton. Frankie's has the right 7.1 to select and display advertising copy on billboard panels numbered 10 and 12 (panel numbers correspond to desig- nated billboard locations) for a 3-year period from Jan. 1, 20X1, to Dec. 31, 20X3. In consideration for these rights, Frankie's agrees to pay $10,000 in year 1, $12,000 in year 2, and $13,000 in year 3. Assume that Frankie's is required to pay the annual fee on Jan. 1 of each contract year. Assuming Frankie's incremental borrowing rate is 5%, what are the entries Frankie should record at inception of the contract, then at the end of years 1, 2, and 3? Making the Cheese Refer to the previous case study. Now evaluate the entries that Simmons Boards should record 7.2 at inception of the advertising agreement with Frankie's, as well as at the end of each contract year? More Cheese Frankie's Homemade Cheese Shop is expanding. The shops along Route 33 have been so successful 7.3 hat Frankie's is building a new cheese superstore along Route 5 in a neighboring state. Frankie's parent company, Dairy Joe Corp., is determining which of the following costs may be capitalized as part of the construction project. Fairy Joe has asked you to draft a capitalization policy describing at what point, and which, costs can be capitalized a new-build construction project. Address whether the following costs are eligible for capitalization. Also, describe told her costs Chestond the hot bould be Il guidance. guit unulate disposal cost of this asset? To CASE STUDY QUESTIONS year 220X1, tom 10 ando heese Ahead Frankie's Homemade Cheese Shop ("Frankie's") signed an advertising agreement with Simmons Boards ("Owner") for billboard advertising rights along Route 33 in the town of Hampton. Frankie's has the right 7.1 to select and display advertising copy on billboard panels numbered 10 and 12 (panel numbers correspond to desig- nated billboard locations) for a 3-year period from Jan. 1, 20X1, to Dec. 31, 20X3. In consideration for these rights, Frankie's agrees to pay $10,000 in year 1, $12,000 in year 2, and $13,000 in year 3. Assume that Frankie's is required to pay the annual fee on Jan. 1 of each contract year. Assuming Frankie's incremental borrowing rate is 5%, what are the entries Frankie should record at inception of the contract, then at the end of years 1, 2, and 3? Making the Cheese Refer to the previous case study. Now evaluate the entries that Simmons Boards should record 7.2 at inception of the advertising agreement with Frankie's, as well as at the end of each contract year? More Cheese Frankie's Homemade Cheese Shop is expanding. The shops along Route 33 have been so successful 7.3 hat Frankie's is building a new cheese superstore along Route 5 in a neighboring state. Frankie's parent company, Dairy Joe Corp., is determining which of the following costs may be capitalized as part of the construction project. Fairy Joe has asked you to draft a capitalization policy describing at what point, and which, costs can be capitalized a new-build construction project. Address whether the following costs are eligible for capitalization. Also, describe told her costs Chestond the hot bould be
