Leased Assets

Koffman and Sons signed a four-year lease for a forklift on January 1, 2017. Annual lease payments of $1,286, based on an interest rate of 12%, are to be made every December 31, beginning with December 31, 2017.

PV of Annuity of $1Required:

Refer to the table above for present value factors.

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Round answers to the nearest whole dollar. Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income No Entry X O X No Entry X O X 0 No Entry v O V No Entry V O V Cash e of the leased asset is not recorded at $5,144 ($1,286 x 4). The leased asset should be reported at the present value v of the payments which is $ not at $ 5,144 V Lease Obligation Leased Asset Leased Asset Expense Rent Expense No Entry b. Identify and analyze the effect of the first lease payment on December 31, 2017. Activity Operating and Financing Accounts Cash Increase, Lease Obligation Decrease, Interest Expense Decrease Statement(s) Balance Sheet and Income Statement How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Round answers to the nearest whole dollar. Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income No Entry X O X No Entry X O X O X No Entry V O V No Entry X O X O X Feedback Check My Work Partially correct c. Calculate the amount of depreciation expense for the year 2017. Round answer to the nearest whole dollar. at amount would the lease obligation be presented on the balance sheet as of December 31, 2017? Round answers to the nearest whole dollar. Current liability portion Long-term liability portion