Question
On January 1, 2024, Harlon Consulting entered into a three-year lease for new office space agreeing to lease payments of $6,700 in 2024, $9,400 in
On January 1, 2024, Harlon Consulting entered into a three-year lease for new office space agreeing to lease payments of $6,700 in 2024, $9,400 in 2025, and $12,100 in 2026. Payments are due on December 31 of each year with the first payment being made on December 31, 2024. Harlon is aware that the lessor used a 4% interest rate when calculating lease payments.
Required:
1-4. Prepare the appropriate entries for Harlon Consulting on January 1, 2024, December 31, 2024, 2025 and 2026 to record the lease.
Note: Use tables, Excel, or a financial calculator. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
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Record for Harlon Consulting the beginning of the lease, January 1, 2024
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Record the lease payment for Harlon Consulting. December 31, 2024
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Record the amortization expense for Harlon Consulting. December 31, 2024
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Record the lease payment for Harlon Consulting. December 31, 2025
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Record the amortization expense for Harlon Consulting. December 31, 2025
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Record the lease payment for Harlon Consulting. December 31, 2026
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Record the amortization expense for Harlon Consulting. December 31, 2026
Journal entry Key
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No journal entry required
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Accumulated depreciation
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Amortization expense
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Building
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Cash
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Cost of goods sold
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Deferred sales revenue
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Depreciation expense
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Equipment
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Interest expense
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Interest payable
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Interest receivable
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Interest revenue
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Lease payable
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Maintenance expense
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Notes payable
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Prepaid expense
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Right-of-use asset
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Sales revenue
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Selling expense
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