Need help with amorization table and entries. I did the first part!
Problem 21-3 vanhoe Industries and Shamrock Inc. enter into an agreement that requires Shamrock Inc. to build three diesel-electric engines to Ivanhoe's specifications. Upon completion of the engines, Ivanhoe has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is noncancelable, becomes effective on January 1, 2017, and requires annual rental payments of $431,633 cach January 1, starting January 1, 2017 Ivanhoe's incremental borrowing rate is 10%. The implicit interest rate used by Shamrock Inc. and known to Ivanhoe is 8% The total cost of building the three engines is $2,693,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Ivanhoe depreciates similar equipment on a straight-line basis. At the end of the lease, Ivanhoe assumes title to the engines. Collectibility of the lease payments is reasonably certain; no uncertainties exist relative to unreimbursable lessor costs. Your answer is partially correct. Try again. (b) Prepare the journal entry or entries to record the transaction on January 1, 2017, on the books of Ivanhoc Industries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts, Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Account Titles and Explanation Debit Credit 3128000 Lease Liability (c) Prepare the ournal entry or entries to record the transaction on January 1,2017, on the books of Shamrock nc (credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 58,971.) Account Titles and Explanation Debit Credit 3128000 of Goods Sold 2693 Sales Revenue 3128000 (d) Prepare the journal entries for both the lessee and lessor to record the first rental payment on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Lessee (January 1, 2017) Debit Credit 431 Cash 4316 Lessor (January 1, 2017) Debit Credit 4316 Lease Receivable 4316 Problem 21-3 vanhoe Industries and Shamrock Inc. enter into an agreement that requires Shamrock Inc. to build three diesel-electric engines to Ivanhoe's specifications. Upon completion of the engines, Ivanhoe has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is noncancelable, becomes effective on January 1, 2017, and requires annual rental payments of $431,633 cach January 1, starting January 1, 2017 Ivanhoe's incremental borrowing rate is 10%. The implicit interest rate used by Shamrock Inc. and known to Ivanhoe is 8% The total cost of building the three engines is $2,693,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Ivanhoe depreciates similar equipment on a straight-line basis. At the end of the lease, Ivanhoe assumes title to the engines. Collectibility of the lease payments is reasonably certain; no uncertainties exist relative to unreimbursable lessor costs. Your answer is partially correct. Try again. (b) Prepare the journal entry or entries to record the transaction on January 1, 2017, on the books of Ivanhoc Industries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts, Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Account Titles and Explanation Debit Credit 3128000 Lease Liability (c) Prepare the ournal entry or entries to record the transaction on January 1,2017, on the books of Shamrock nc (credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 58,971.) Account Titles and Explanation Debit Credit 3128000 of Goods Sold 2693 Sales Revenue 3128000 (d) Prepare the journal entries for both the lessee and lessor to record the first rental payment on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Lessee (January 1, 2017) Debit Credit 431 Cash 4316 Lessor (January 1, 2017) Debit Credit 4316 Lease Receivable 4316
