Please help me with the entire problem. I have some missing journal entries and I'm not sure what they are. I'm also not sure if what I currently have is correct.
There are to be no empty journal entries.
ALL INFORMATION NEEDED TO SOLVE THE PROBLEM HAS BEEN PROVIDED. THERE IS NO MISSING INFORMATION.
Here are all possible journal entry options:
Accumulated depreciation (Bal. Sht) Cash (Bal. Sht) Deferred rent revenue (Bal. Sht) Equipment (Bal. Sht) Lease payable (Bal. Sht) Lease receivable (Bal. Sht) Note payable (Bal. Sht) Prepaid service contract (Bal. Sht) Right-of-Use asset (Bal. Sht) Warehouse (Bal. Sht) Amortization expense (Inc. Stmt) Cost of goods sold (Inc. Stmt) Gain on sale of warehouse (Inc. Stmt) Interest expense (Inc. Stmt) Interest revenue (Inc. Stmt) Lease expense (Inc. Stmt) Lease revenue (Inc. Stmt) Misc. expenses (Inc. Stmt) Rent revenue (Inc. Stmt) Sales revenue (Inc. Stmt)
Present value charts:
Problem 11. Sellco was in need of cash. Its solution: sell a warehouse to Buyco for $4,000,000 (the fair market value) and then lease back the warehouse from Buyco to continue using it. The amortized cost of the warehouse to Sellco was $3,000,000 (cost of 5,000,000 less accumulated depreciation of $2,000,000). The warehouse has a remaining useful life of 15 and is expected to have a residual value of $1,000,000 at the end of the lease. The lease term is for 10 years. Buyco's implicit rate is 12%/year and this rate is known by Sellco. The lease payment is 581,208/year with the first payment due at the inception of the lease (which was 1/1/2020). The remaining payments are due at 12/31 each year. Required 1. Prepare Sellco's entries on 1/1/2020 to record the transaction. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Entries by Sellco on 1/1/2020: Credit Debit $4,000,000.00 $275,822.00 1 1 Account Cash (Bal. Sht) Right-of-Use asset (Bal. Sht) Warehouse (Bal. Sht) Lease payable (Bal. Sht) Gain on sale of warehouse (Inc. Stmt) 1 $3,000,000.00 $3,678,029.00 $80,493.00 1 1 1 2. Redo #1 assuming that the warehouse is expected to have a residual value of $1,500,000 (unguaranteed) at the end of the lease and the lease payment is $555,768. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Entries by Sellco on 1/1/2020: Credit Debit $4,000,000.00 $2,637,779.00 2 2 Account Cash (Bal. Sht) Right-of-Use asset (Bal. Sht) Warehouse (Bal. Sht) Lease payable (Bal. Sht) Gain on sale of warehouse (Inc. Stmt) $3,000,000.00 $3,517,039.00 120,740 2 2 2 2 2 2 TABLE 2 Present Value of $1 $1 (1 + i)" n/i 1.0% 1.5% 2.0% 2.5% PV = n in 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 0.83333 0.69444 10.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94787 0.94340 0.93458 2 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89845 0.89000 0.87344 3 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.85161 0.83962 0.81630 4 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856 0.82270 0.80722 0.79209 0.76290 5 0.95147 0.92826 0.90573 0.88385 0.86261 0.84197 0.82193 0.80245 0.78353 0.76513 0.74726 0.71299 0.92593 0.91743 0.90909 0.85734 0.84168 0.82645 0.79383 0.77218 0.75131 0.73503 0.70843 0.68301 0.68058 0.64993 0.62092 0.90090 0.89286 0.81162 0.79719 0.73119 0.71178 0.65873 0.63552 0.59345 0.56743 0.57870 0.48225 0.40188 6 0.94205 0.91454 0.88797 0.86230 0.83748 0.81350 0.79031 0.76790 0.74622 0.72525 0.70496 0.66634 7 0.93272 0.90103 0.87056 0.84127 0.81309 0.78599 0.75992 0.73483 0.71068 0.68744 0.66506 0.62275 8 0.92348 0.88771 0.85349 0.82075 0.78941 0.75941 0.73069 0.70319 0.67684 0.65160 0.62741 0.58201 9 0.91434 0.87459 0.83676 0.80073 0.76642 0.73373 0.70259 0.67290 0.64461 0.61763 0.59190 0.54393 10 0.90529 0.86167 0.82035 0.78120 0.74409 0.70892 0.67556 0.64393 0.61391 0.58543 0.55839 0.50835 0.63017 0.59627 0.56447 0.53464 0.50663 0.58349 0.54703 0.51316 0.48166 0.45235 0.54027 0.50187 0.46651 0.43393 0.40388 0.50025 0.46043 0.42410 0.39092 0.36061 0.46319 0.42241 0.38554 0.35218 0.32197 0.33490 0.27908 0.23257 0.19381 0.16151 11 0.89632 0.84893 0.80426 0.76214 0.72242 0.68495 0.64958 0.61620 0.58468 0.55491 0.52679 0.47509 0.42888 0.38753 0.35049 12 0.88745 0.83639 0.78849 0.74356 0.70138 0.66178 0.62460 0.58966 0.55684 0.52598 0.49697 0.44401 0.39711 0.35553 0.31863 13 0.87866 0.82403 0.77303 0.72542 0.68095 0.63940 0.60057 0.56427 0.53032 0.49856 0.46884 0.41496 0.36770 0.32618 0.28966 14 0.86996 0.81185 0.75788 0.70773 0.66112 0.61778 0.57748 0.53997 0.50507 0.47257 0.44230 0.38782 0.34046 0.29925 0.26333 15 0.86135 0.79985 0.74301 0.69047 0.64186 0.59689 0.55526 0.51672 0.48102 0.44793 0.41727 0.36245 0.31524 0.27454 0.23939 0.31728 0.28748 0.28584 0.25668 0.25751 0.22917 0.23199 0.20462 0.20900 0.18270 0.13459 0.11216 0.09346 0.07789 0.06491 16 0.85282 0.78803 0.72845 0.67362 0.62317 0.57671 0.53391 0.49447 0.45811 0.42458 0.39365 0.33873 17 0.84438 0.77639 0.71416 0.65720 0.60502 0.55720 0.51337 0.47318 0.43630 0.40245 0.37136 0.31657 18 0.83602 0.76491 0.70016 0.64117 0.58739 0.53836 0.49363 0.45280 0.41552 0.38147 0.35034 0.29586 19 0.82774 0.75361 0.68643 0.62553 0.57029 0.52016 0.47464 0.43330 0.39573 0.36158 0.33051 0.27651 20 0.81954 0.74247 0.67297 0.61027 0.55368 0.50257 0.45639 0.41464 0.37689 0.34273 0.31180 0.25842 0.29189 0.25187 0.21763 0.18829 0.16312 0.27027 0.23107 0.19784 0.16963 0.14564 0.25025 0.21199 0.17986 0.15282 0.13004 0.23171 0.19449 0.16351 0.13768 0.11611 0.21455 0.17843 0.14864 0.12403 0.10367 0.05409 0.04507 0.03756 0.03130 0.02608 21 0.81143 0.73150 0.65978 0.59539 0.53755 0.48557 0.43883 0.39679 0.35894 0.32486 0.29416 0.24151 24 0.78757 0.69954 0.62172 0.55288 0.49193 0.43796 0.39012 0.34770 0.31007 0.27666 0.24698 0.19715 25 0.77977 0.68921 0.60953 0.53939 0.47761 0.42315 0.37512 0.33273 0.29530 0.26223 0.23300 0.23300 0.18425 28 0.75684 0.65910 0.57437 0.50088 0.43708 0.38165 0.33348 0.29157 0.25509 0.22332 0.19563 0.15040 29 0.74934 0.64936 0.56311 0.48866 0.42435 0.36875 0.32065 0.27902 0.24295 0.21168 0.18456 0.14056 0.19866 0.16370 0.13513 0.15770 0.12640 0.10153 0.14602 0.11597 0.09230 0.11591 0.08955 0.06934 0.10733 0.08215 0.06304 0.11174 0.09256 0.08170 0.06588 0.07361 0.05882 0.05382 0.04187 0.04849 0.03738 0.02174 0.01258 0.01048 0.00607 0.00506 1 TABLE4 Present Value of an Ordinary Annuity of $1 1 - (1 + in PVA = i n/i 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 2 3 0.99010 0.98522 0.98039 1.97040 1.95588 1.94156 2.94099 2.91220 2.88388 3.90197 3.85438 3.80773 4.85343 4.78264 4.71346 0.97561 0.97087 0.96618 0.96618 0.96154 0.95694 1.92742 1.91347 1.89969 1.88609 1.87267 2.85602 2.82861 2.80164 2.77509 2.74896 3.76197 3.71710 3.67308 3.62990 3.58753 4.64583 4.57971 4.51505 4.45182 4.38998 0.95238 0.94787 0.94340 1.85941 1.84632 1.83339 2.72325 2.69793 2.67301 3.54595 3.50515 3.46511 4.32948 4.27028 4.21236 0.93458 0.92593 0.91743 0.90909 0.90090 0.89286 0.83333 1.80802 1.78326 1.78326 1.75911 1.73554 1.71252 1.69005 1.52778 2.62432 2.57710 2.53129 2.48685 2.44371 2.40183 2.10648 3.38721 3.31213 3.23972 3.16987 3.10245 3.03735 2.58873 4.10020 3.99271 3.88965 3.79079 3.69590 3.60478 2.99061 4 5 6 5.79548 5.69719 5.60143 7 6.72819 6.59821 6.47199 8 7.65168 7.48593 7.32548 9 8.56602 8.36052 8.16224 10 9.47130 9.22218 8.98259 5.50813 5.41719 5.32855 5.24214 5.15787 6.34939 6.23028 6.11454 6.00205 5.89270 7.170147.01969 7.01969 6.87396 6.73274 6.59589 7.97087 7.78611 7.607697.43533 7.26879 8.75206 8.53020 8.31661 8.11090 7.91272 5.07569 4.99553 4.91732 5.78637 5.68297 5.58238 6.46321 6.33457 6.20979 7.10782 6.95220 6.80169 7.72173 7.53763 7.36009 4.76654 4.62288 4.48592 4.35526 4.23054 4.11141 3.32551 5.38929 5.20637 5.03295 4.86842 4.71220 4.56376 3.60459 5.97130 5.74664 5.53482 5.33493 5.14612 4.96764 3.83716 6.51523 6.24689 5.99525 5.75902 5.53705 5.32825 4.03097 7.02358 6.71008 6.41766 6.14457 5.88923 5.65022 4.19247 11 10.36763 10.07112 9.78685 9.51421 9.25262 9.00155 8.76048 8.52892 8.30641 8.09254 7.88687 12 11.25508 10.90751 10.57534 10.25776 9.95400 9.66333 9.38507 9.38507 9.11858 8.86325 8.61852 8.38384 13 12.13374 11.73153 11.34837 10.98319 10.63496 10.30274 9.98565 9.68285 9.39357 9.11708 8.85268 14 13.00370 12.54338 12.10625 11.69091 11.29607 10.92052 10.56312 10.22283 9.89864 9.58965 9.29498 15 13.86505 13.34323 12.84926 12.38138 11.93794 11.51741 11.11839 10.73955 10.37966 10.03758 9.71225 7.49867 7.13896 6.80519 6.49506 6.20652 5.93770 4.32706 7.94269 7.53608 7.16073 6.81369 6.49236 6.19437 4.43922 8.35765 7.90378 7.48690 7.10336 6.74987 6.42355 4.53268 8.74547 8.24424 7.78615 7.36669 6.98187 6.62817 4.61057 9.10791 8.55948 8.06069 7.60608 7.19087 6.81086 4.67547 16 14.71787 14.13126 13.57771 13.05500 12.56110 12.09412 11.65230 11.23402 10.83777 10.46216 10.10590 9.44665 8.85137 8.31256 7.82371 7.37916 6.97399 4.72956 17 15.56225 14.90765 14.29187 13.71220 13.16612 12.65132 12.16567 11.70719 11.27407 10.86461 10.47726 9.76322 9.12164 8.54363 8.02155 7.54879 7.11963 4.77463 18 16.39827 15.67256 14.99203 14.35336 13.75351 13.18968 12.65930 12.15999 11.68959 11.24607 10.82760 10.05909 9.37189 8.75563 8.20141 7.70162 7.24967 4.81219 19 17.22601 16.42617 15.67846 14.97889 14.32380 13.70984 13.13394 12.59329 12.08532 11.60765 11.15812 10.33560 9.60360 8.95011 8.36492 7.83929 7.36578 4.84350 20 18.04555 17.16864 16.35143 15.58916 14.87747 14.21240 13.59033 13.00794 12.46221 11.95038 11.46992 10.59401 9.81815 9.12855 8.51356 7.96333 7.46944 4.86958 21 18.85698 17.90014 17.01121 16.18455 15.41502 14.69797 14.02916 13.40472 12.82115 12.27524 11.76408 10.83553 10.01680 9.29224 8.64869 8.07507 7.56200 4.89132 25 22.02316 20.71961 19.52346 18.42438 17.41315 16.48151 15.62208 14.82821 14.09394 13.41393 12.78336 11.65358 10.67478 9.82258 9.07704 8.42174 7.84314 4.94759 30 25.80771 24.01584 22.39646 20.93029 19.60044 18.39205 17.29203 16.28889 15.37245 14.53375 13.76483 12.40904 11.25778 10.27365 9.42691 8.69379 8.05518 4.97894 40 32.83469 29.91585 27.35548 25.10278 23.11477 21.35507 19.79277 18.40158 17.15909 16.04612 15.04630 13.33171 11.92461 10.75736 9.77905 8.95105 8.24378 4.99660 TABLE 6 Present Value of an Annuity Due of $1 1 (1 + i) X (1+1) 1 PVAD n/l 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 20.0% 1 1.00000 2 3 3 4 1.00000 1.00000 1.00000 1.99010 1.98522 1.98039 2.97040 2.95588 2.94156 3.94099 3.91220 3.88388 4.90197 4.85438 4.80773 1.00000 1.00000 1.97561 1.97087 2.92742 2.91347 3.85602 3.82861 4.76197 4.71710 1.96618 2.89969 3.80164 4.67308 1.00000 1.00000 1.96154 1.95694 2.88609 2.87267 3.77509 3.74896 4.62990 4.58753 1.00000 1.00000 1.95238 1.94787 2.85941 2.84632 3.72325 3.69793 4.54595 4.50515 1.00000 1.00000 1.00000 1.00000 1.94340 1.93458 1.92593 1.91743 2.83339 2.80802 2.78326 2.78326 2.75911 3.67301 3.62432 3.57710 3.57710 3.53129 4.46511 4.38721 4.31213 4.23972 1.00000 1.00000 1.00000 1.00000 1.90909 1.90090 1.89286 1.83333 2.73554 2.71252 2.69005 2.52778 3.48685 3.44371 3.40183 3.10648 4.16987 4.10245 4.03735 3.58873 5 6 5.85343 5.78264 5.71346 7 6.79548 6.69719 6.60143 8 7.72819 7.59821 7.47199 9 8.65168 8.48593 8.32548 10 9.56602 9.36052 9.36052 9.16224 5.64583 5.57971 5.51505 6.50813 6.41719 6.32855 7.34939 7.23028 7.11454 8.17014 8.01969 7.87396 8.97087 8.78611 8.60769 5.45182 5.38998 6.24214 6.15787 7.00205 6.89270 7.73274 7.59589 8.43533 8.26879 5.32948 5.27028 6.07569 5.99553 6.78637 6.68297 7.46321 7.33457 8.10782 7.95220 5.21236 5.10020 4.99271 4.88965 5.91732 5.76654 5.62288 5.48592 6.58238 6.38929 6.20637 6.03295 7.20979 6.97130 6.74664 6.74664 6.53482 7.801697.51523 7.24689 6.99525 4.79079 4.69590 4.60478 3.99061 5.35526 5.23054 5.11141 4.32551 5.86842 5.71220 5.56376 4.60459 6.33493 6.14612 5.96764 4.83716 6.75902 6.53705 6.32825 5.03097 11 10.47130 10.22218 9.98259 9.75206 9.53020 9.31661 9.11090 8.91272 8.72173 8.53763 8.36009 8.02358 7.71008 7.41766 12 11.36763 11.07112 10.78685 10.51421 10.25262 10.00155 9.76048 9.52892 9.30641 9.09254 8.88687 8.49867 8.13896 7.80519 13 12.25508 11.90751 11.57534 11.25776 10.95400 10.66333 10.38507 10.11858 9.86325 9.61852 9.38384 8.94269 8.53608 8.16073 14 13.13374 12.73153 12.34837 11.98318 11.63496 11.30274 10.98565 10.68285 10.39357 10.11708 9.85268 9.35765 9.35765 8.90378 8.48690 15 14.00370 13.54338 13.10625 12.69091 12.29607 11.92052 11.56312 11.22283 10.89864 10.58965 10.29498 9.74547 9.24424 8.78615 7.14457 6.88923 6.65022 5.19247 7.49506 7.20652 6.93770 5.32706 7.81369 7.49236 7.19437 5.43922 8.10336 7.74987 7.42355 5.53268 8.36669 7.98187 7.62817 5.61057 16 14.86505 14.34323 13.84926 13.38138 12.93794 12.51741 12.11839 11.73955 11.37966 11.03758 10.71225 10.10791 9.55948 9.06069 17 15.71787 15.13126 14.57771 14.05500 13.56110 13.09412 12.65230 12.23402 11.83777 11.46216 11.10590 10.44665 9.85137 9.31256 18 16.56225 15.90765 15.29187 14.71220 14.16612 13.65132 13.16567 12.70719 12.27407 11.86461 11.47726 10.76322 10.12164 9.54363 19 17.39827 16.67256 15.99203 15.35336 14.75351 14.18968 13.65930 13.15999 12.68959 12.24607 11.82760 11.05909 10.37189 9.75563 20 18.22601 17.42617 16.67846 15.97889 15.32380 14.70984 14.13394 13.59329 13.08532 12.60765 12.15812 11.33560 10.60360 9.95011 8.60608 8.19087 7.81086 5.67547 8.82371 8.37916 7.97399 5.72956 9.02155 8.54879 8.11963 5.77463 9.20141 8.70162 8.24967 5.81219 9.36492 8.83929 8.36578 5.84350 21 19.04555 18.16864 17.35143 16.58916 15.87747 15.21240 14.59033 14.00794 13.46221 12.95038 12.46992 11.59401 10.81815 10.12855 9.51356 8.96333 8.46944 5.86958 25 22.24339 21.03041 19.91393 18.89499 17.93554 17.05837 16.24696 15.49548 14.79864 14.15170 13.55036 12.46933 11.52876 10.70661 9.98474 9.34814 8.78432 5.93710 30 26.06579 24.37608 22.84438 21.45355 20.18845 19.03577 17.98371 17.02189 16.14107 15.33310 14.59072 13.27767 12.15841 11.19828 10.36961 9.65011 9.02181 5.97472 40 33.16303 30.36459 27.90259 25.73034 23.80822 22.10250 20.58449 19.22966 18.01704 16.92866 15.94907 14.26493 12.87859 11.72552 10.75696 9.93567 9.23303 5.99592
