Problem 15-5 (Algo) Lessee; operating lease; advance payment; leasehold improvement [LO15-4] On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $75,000 each, beginning December 31,2024 , and on each December 31 through 2026 . The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 7\%. Winn also paid a $330,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the buliding before occupying the space at a cost of $405.000. The useful life of the bulding and the structural modifications were estimated to be 30 years with no residual value. Note: Use tables, Excel, or a financial calculator. (EV of \$1, PV of \$1, FVA of \$1, PVA of S1, EVAD of \$1 and PVAD of \$1) Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar. Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of is the calendar year. Note: If no entry is required for a transaction/event, select "N journal entry answers to the nearest whole dollar. 1 Record the beginning of the lease for Winn. 2 Record the advance payment made at the beginning of the lease by Winn. 3 Record the purchase of the leasehold improvements by Winn. 4 Record the lease and interest payment for Winn. 5 Record the amortization for Winn. 6 Record depreciation for Winn. 7 Record the lease and interest payment for Winn. Note : = journal entry has been entered answers to the nearest whole dollar. Problem 15-5 (Algo) Lessee; operating lease; advance payment; leasehold improvement [LO15-4] On January 1, 2024, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual lease payments of $75,000 each, beginning December 31,2024 , and on each December 31 through 2026 . The lessor, HVAC Leasing, calculates lease payments based on an annual interest rate of 7\%. Winn also paid a $330,000 advance payment at the beginning of the lease. With permission of the owner, Winn made structural modifications to the buliding before occupying the space at a cost of $405.000. The useful life of the bulding and the structural modifications were estimated to be 30 years with no residual value. Note: Use tables, Excel, or a financial calculator. (EV of \$1, PV of \$1, FVA of \$1, PVA of S1, EVAD of \$1 and PVAD of \$1) Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of the lease through the end of 2026. Winn's fiscal year is the calendar year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar. Required: Prepare the appropriate entries for Winn Heat Transfer from the beginning of is the calendar year. Note: If no entry is required for a transaction/event, select "N journal entry answers to the nearest whole dollar. 1 Record the beginning of the lease for Winn. 2 Record the advance payment made at the beginning of the lease by Winn. 3 Record the purchase of the leasehold improvements by Winn. 4 Record the lease and interest payment for Winn. 5 Record the amortization for Winn. 6 Record depreciation for Winn. 7 Record the lease and interest payment for Winn. Note : = journal entry has been entered answers to the nearest whole dollar
