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On January 1, 2024, Taco King leased retal space from Fogeiman Properties. The 10 year finance lease requires quarterly variable lease payments equal to 3%
On January 1, 2024, Taco King leased retal space from Fogeiman Properties. The 10 year finance lease requires quarterly variable lease payments equal to 3% of Toco King's sales revenue, with a quarterly sales minimum of $500,000. Payments at the beginning of each quarter are based on previous quarter sales. Dufing the previous five-year period, Taco King has generoted quarterly sales of over $700,000. Fogeiman's interest rate, known by Taco King, was 4%. Note: Use tables, Excel, or a financial calculator, (EV of S1, PV of S1, EVA orS1, PVA of S1. EVAD of SI and PVAD of S1) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease on January 1,2024. 2. Prepare the journal entries for Taco King on April 1, 2024. First quarter sales were $710,000. Amortization is recorded quarterly
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