Answered step by step
Verified Expert Solution
Question
1 Approved Answer
i need part two filled the chart Question 1 Yuan Company acquired an equipment on a 10-year non-cancelable lease on January 1, 20X1. There were
i need part two filled the chart Question 1 Yuan Company acquired an equipment on a 10-year non-cancelable lease on January 1, 20X1. There were annual lease payments of $200 at the end of each of the ten years. The market interest rate was 10% compounded annually. Assume that the lease year coincides with the fiscal year. Present value of $1 annuity (n=10, i=10%) = 6.1446. Note that the useful life of the equipment is 12 years. 1. According to GAAP, is the above lease a capital or an operating lease? Why? 2. Irrespective of your answer to part 1, assume that the lease is a capital lease. Show the entries that the company will make at the inception of the lease and during the first two years of the lease term. (Use straight-line amortization method). 8 9 Question 1-2 (the leasels capital lease) 10 Accumulated Amortization Lease Obligation Retained Earnings Comments on Retained Faming 11 12 13 Equipment Date Cash Lease Hold 1/1/20X1 12/31/20X1 12/31/20X1 12/31/20X2 12/31/20X2 * whether it affects revenues, expenses (type of expense),etc. 14 15 16
i need part two filled the chart
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started