Question
Neely BBQ leased equipment from Smoke Industries on January 1, 2021. Smoke Industries had manufactured the equipment at a cost of $810,000. Other information: Lease
Neely BBQ leased equipment from Smoke Industries on January 1, 2021. Smoke Industries had manufactured the equipment at a cost of $810,000.
| Other information: | ||
| Lease term | 4 years | |
| Annual payments | $360,000 beginning Jan. 1, 2021, and at Dec. 31, 2021, 2022, and 2023 | |
| Life of asset | 4 years | |
| Rate the lessor charges | 8% | |
Prepare the appropriate entries for Smoke Industries (Lessor) on January 1, 2021, and December 31, 2021. Assume that control is transferred to the lessee. Show your calculations and round the amounts to the nearest whole dollar.
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Core Concepts Of Accounting Information Systems
Authors: Nancy A. Bagranoff, Mark G. Simkin, Carolyn Strand Norman
11th Edition
9780470507025, 0470507020
