Question
On January 1, 2018, Hester Co. sells machinery to Beck Corp. at its fair value of $720,000 and leases it back. The machinery had a
On January 1, 2018, Hester Co. sells machinery to Beck Corp. at its fair value of $720,000 and leases it back. The machinery had a carrying value of $631,800, the lease is for 10 years and the implicit rate is 10%. The lease payments of $106,200 start on January 1, 2018. Hester uses straight-line depreciation and there is no residual value.
Instructions
Prepare all of Hester’s entries for 2018.
Step by Step Solution
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H Co Lessee Date Account Title LF Debit Credit IJan18 Cash 72...
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077328894, 71313974, 9780077395810, 77328892, 9780071313971, 77395816, 978-0077400163
