Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for

image text in transcribed
On January 1, 2021, Rick's Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years, Rick's had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option Annual lease payments are $14,500 due on December 31 of each year, calculated by the lessor using a 6% interest rate. The agreement is considered an operating lease. (FV of $1. PV L$1. FVA of S1. PVA OLSI. FVAD of Si and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare Rick's journal entry to record for the right-of-use asset and lease liability at January 1, 2021 2. Prepare the journal entries to record interest and amortization at December 31, 2021 Complete this question by entering your answers in the tabs below. Required: Required Prepare Rick's journal entry to record for the right of use asset and lease ability at January 1, 2021 (It no entry is required for a transaction/event, select No journal entry required in the first account field Round your bawers to the nearest whole dollar amount)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray Garrison, Eric Noreen, Peter Brewer

11th Edition

0072834943, 9780072834949

More Books

Students also viewed these Accounting questions

Question

1. Ask a member of the family to share a skill or hobby.

Answered: 1 week ago