On January 1, 2021, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $60,000 each, beginning December 31, 2021, and at each December 31 through 2023. The lessor, HVAC Leasing calculates lease payments based on an annual interest rate of 5% Winn also paid a $180,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $240,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. (FV of $1. PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2023. Winn's fiscal year is the calendar year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollars.) Answer is not complete General Journal No Credit Debit 343,398 1 Dato January 01, 2021 Right-of-use asset Lease payable 343,398 2 January 01, 2021 Prepaid expense Cash 180,000 180,000 3 8,170 December 31, 2021 Interest expense Lease payable Cash 60,000 4 3 December 31, 2021 Lease payable Prepad expense 60,000 60,000 teen Problems - GRADED O Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not in NO General Journal Credit Dato January 01, 2021 Right-of-use asset Lease payable Denn 343,3983 1 343,398 3 2 180,000 January 01, 2021 Prepaid expense Cash 180,000 3 December 31, 2021 Incorost expense 8,170 Lease payable Cash OO 60,000 60,000 December 31, 2021 Lease payable Prepaid expense . 60,000 5 December 31, 2021 Amortization expense 111,830 3 3 Right-of-use as 111,830 6 December 31, 2022 Depreciation expense Accumulated depreciation - leasehold improvement 80.000 3 30,000 3 7 December 31, 2022 interest expense Les payable Cash Lease payable 5,578 54 422 60,000 60.000 3 Proy 1 of 4 THE Next > 5 6. 7 8. 7 December 31, 2022 Interest expense 5,578 % 54,422 % 60,000 Lease payable Cash Lease payable Prepaid expense 60,000 60,000 8 114,422 December 31, 2022 Amortization expense Right-of-use asset Depreciation expense Accumulated depreciation - leasehold improvement 114.422 80,000 X 80,000 9 > 2,857 57.143 December 31, 2023 Interest expense Lease payable Cash Lease payable Prepaid expense 60,000 60,000 60,000 10 December 31, 2023 Amortization expense Right-of-use asset 117,143 117,143 11 December 31, 2023 Depreciation expense 80,000 Accumulated depreciation - leasehold improvement 80,000
