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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
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 $102,000 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 5%. Winn also paid a $213,000 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 $315,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. Note: Use tables, Excel, or a financial calculator. (FV of S1. PV of S1, FVA of \$1, PVA of \$1. FVAD 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. 1 Record the beginning of the lease for Winn. 12 2 Record the advance payment made at the beginning of the lease by winn. 3 Record the purchase of the leasehold improvements by Winn. your answers to the nearest whole dollar
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