HW - 15.1 - Leases
American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 11%. (FV of $1,PV of $1,FVA of $1,PVA of $1, FVAD of $1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. \& 4. Prepare the appropriate entries related to the lease on December 31,2021 and 2023. Complete this question by entering your answers in the tabs below. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. (Enter your answers in whole dollars and not in millions. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the beginning of the lease for American Food Services. Note: Enter debits before credits. American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 11%. (FV of $1,PV of $1,FV of $1, PVA of $1, FVAD of $1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. \& 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollars and not in millions. Round your answers to the nearest whole dollar. Enter all amounts as positive values.) Journal entry worksheet Record the lease payment and interest expense for American Food Services. Note: Enter debits before credits. Journal entry worksheet Record the amortization of right-of-use asset for American Food Services. Note: Enter debits before credits. Journal entry worksheet Record the lease payment and interest expense for American Food Services. Note: Enter debits before credits. Journal entry worksheet Record the amortization of right-of-use asset for American Food Services. Note: Enter debits before credits. American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 11%. (FV of $1,PV of $1,FVA of $1,PVA of $1, FVAD of $1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. \& 4. Prepare the appropriate entries related to the lease on December 31,2021 and 2023. Complete this question by entering your answers in the tabs below. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. (Enter your answers in whole dollars and not in millions. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the beginning of the lease for American Food Services. Note: Enter debits before credits. American Food Services, Inc. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement for the $4.4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be five years with no residual value. Barton and Barton's implicit interest rate was 11%. (FV of $1,PV of $1,FV of $1, PVA of $1, FVAD of $1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the lease. 3. \& 4. Prepare the appropriate entries related to the lease on December 31, 2021 and 2023. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule for the four-year term of the lease. (Enter your answers in whole dollars and not in millions. Round your answers to the nearest whole dollar. Enter all amounts as positive values.) Journal entry worksheet Record the lease payment and interest expense for American Food Services. Note: Enter debits before credits. Journal entry worksheet Record the amortization of right-of-use asset for American Food Services. Note: Enter debits before credits. Journal entry worksheet Record the lease payment and interest expense for American Food Services. Note: Enter debits before credits. Journal entry worksheet Record the amortization of right-of-use asset for American Food Services. Note: Enter debits before credits
