Question
Kingbird Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Blossom Company. The term of the non-cancelable lease is
Kingbird Leasing Company signs a lease agreement on January 1, 2020, to lease warehouse equipment to Blossom Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:
1. Blossom has the option to purchase the equipment for $ 20,300 upon termination of the lease. It is not reasonably certain that Blossom will exercise this option.
2. The equipment has a cost of $ 164,000 and fair value of $ 189,000 to Kingbird Leasing. The useful economic life is 2 years, with a residual value of $ 20,300.
3. Kingbird Leasing desires to earn a return of 6% on its investment.
4. Collectibility of the payments by Kingbird Leasing is probable.
Prepare the journal entries on the books of Kingbird to recognize the establishment of the lease and the receipt of payments in 2020 and 2021. Do not include the return of the equipment at lease termination. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.)
Date | Account Titles and Explanation | Debit | Credit | |
---|---|---|---|---|
| enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount | ||
choose a transaction date 1/1/2012/31/2012/31/21 | enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount | ||
choose a transaction date 1/1/2012/31/2012/31/21 | enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | ||
enter an account title | enter a debit amount | enter a credit amount |
Assuming that Blossom exercise its option tp purchase the equipment on December 31, 2020, prepare the journal entry to record the sales on Kingbird's books.
choose a transaction date 12/31/20 | enter an account title | enter a debit amount | enter a credit amount |
---|---|---|---|
enter an account title | enter a debit amount | enter a credit amount |
Chrome File Edit View History Bookmarks Profiles Tab Window Help 81% 1 1 Tue 11:52 AM Q E interest_rate_tables.pdf X + Update: C education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf Apps M Gmail O YouTube 7 Email - University. Blackboard Learn T Login to Your Cou... - Zo... MWISER - Universit... PAST52 (... , 1) * Reading List = interest_rate_tables.pdf 3/10 - 100% + A 0) 8% TABLE 6.2 Present Value of 1 (Present Value of a Single Sum) PVF- 1 11.1" 1+ - (1 + i) ni Periode 2% 2xx 3% 4% .68038 97561 .87037 98154 .56117 .95181 94260 ..92456 .94232 -92800 .91614 .89900 02385 90595 .88848 85480 .80573 80385 .66281 .82183 5% 95233 .90703 .98394 .82270 .78353 .94340 .89300 .83902 .79209 .74726 .88787 .87056 .85349 .83678 .82035 86230 84127 82075 ann 80073 .78120 .85748 .8 1309 .78941 .76642 .74409 79031 75902 .73069 -79259 .67556 .74622 .71068 .87694 .64401 .81391 .70496 .GOSCE .62741 . .59190 .55839 10 11 12 13 14 15 .80626 .78849 .77303 .7b798 .74301 .76214 .74956 -72542 -70773 88047 .72242 .70139 .88035 .86112 .64186 .64958 .62460 .60057 .67748 55526 .58488 .55684 .53032 .SCOOH .48102 .52979 .49597 .48884 .44220 .41727 g1235 57899 HBQge Enge% 72845 .71410 .70016 .88843 .67297 67362 .65720 .84117 82553 81027 62317 .60032 .58739 .57029 .55368 53391 .61327 48368 47484 45699 45811 42630 .41552 .36673 37688 39365 .37126 .35034 .33051 31180 20 21 22 29 .6597 .84804 69416 .62172 scars .60952 59559 50CBB 56670 55288 53999 .55755 .52199 .50888 .49193 1013 47761 4383 .42166 43573 .39012 37512 .35814 .34135 32557 31007 .25531 .29416 .27751 28180 .24886 .23300 25 26 27 28 28 30 .59756 .58508 .57437 .56311 .56207 52623 -51340 SOCHA 48866 47674 .46359 .45019 45708 .12435 41199 35069 34862 33348 32065 30482 .28124 .26735 -25503 24295 .29139 .2 1981 .20737 1956S .18456 .17411 31 32 .54125 .59083 .52023 .51003 .50009 46511 45377 44270 43191 42187 .25999 .38834 37703 .36634 .25638 29646 28506 27400 29355 25342 .22038 .20987 .1997 18035 .18129 .16425 .15486 .14519 13701 .13011 34 35 A
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