Question
On January 1, 2017, Concord Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Concord to make annual
On January 1, 2017, Concord Corporation signed a 5-year noncancelable lease for a machine. The terms of the lease called for Concord to make annual payments of $8,479 at the beginning of each year, starting January 1, 2017. The machine has an estimated useful life of 6 years and a $4,600 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Concord uses the straight-line method of depreciation for all of its plant assets. Concords incremental borrowing rate is 10%, and the lessors implicit rate is unknown. Click here to view factor tables
Incorrect answer iconYour answer is incorrect.
Compute the present value of the minimum lease payments. (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.)
The present value of the minimum lease payments | $enter the present value of the minimum lease payments rounded to 0 decimal places |
eTextbook and Media
List of Accounts
Partially correct answer iconYour answer is partially correct.
Prepare all necessary journal entries for Concord for this lease through January 1, 2018. (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.)
Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
choose a transaction date 1/1/1712/31/171/1/18 | enter an account title to record the lease | enter a debit amount | enter a credit amount |
enter an account title to record the lease | enter a debit amount | enter a credit amount | |
(To record the lease.) | |||
enter an account title to record the first payment | enter a debit amount | enter a credit amount | |
enter an account title to record the first payment | enter a debit amount | enter a credit amount | |
(To record first payment.) | |||
choose a transaction date 1/1/1712/31/171/1/18 | enter an account title to record depreciation | enter a debit amount | enter a credit amount |
enter an account title to record depreciation | enter a debit amount | enter a credit amount | |
(To record depreciation.) | |||
enter an account title to record interest | enter a debit amount | enter a credit amount | |
enter an account title to record interest | enter a debit amount | enter a credit amount | |
(To record interest.) | |||
1/1/18 | enter an account title to record second payment on January 1, 2018 | enter a debit amount | enter a credit amount |
enter an account title to record second payment on January 1, 2018 | enter a debit amount | enter a credit amount | |
enter an account title to record second payment on January 1, 2018 | enter a debit amount | enter a credit amount | |
(To record second payment.) |
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