Problem 21-01 The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sweet Company, a lessee. Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $123,849 Residual value of equipment at end of lease term, guaranteed by the lessee $55,000 Expected residual value of equipment at end of lease term $50,000 Lease term 6 years Economic life of leased equipment 6 years Fair value of asset at January 1, $653,000 Lessors implicit rate 8 % Lessees incremental borrowing rate 8 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Click here to view factor tables. Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 5,275.) SWEET COMPANY (Lessee) Lease Amortization Schedule Date Annual Lease Payment Plus GRV Interest on Liability Reduction of Lease Liability Lease Liability 1/1/20 $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places 621494 1/1/20 enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places 497645 1/1/21 enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places 39812 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 1/1/22 enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 1/1/23 enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 1/1/24 enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 1/1/25 enter a dollar amount rounded to 0 decimal places 123849 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places 12/31/26 enter a dollar amount rounded to 0 decimal places 5000 enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places enter a dollar amount rounded to 0 decimal places $enter a total amount $enter a total amount $enter a total amount SHOW LIST OF ACCOUNTS Prepare all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessees annual accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title to record the lease enter a debit amount enter a credit amount enter an account title to record the lease enter a debit amount enter a credit amount (To record the lease.) choose a transaction date enter an account title to record first lease payment enter a debit amount enter a credit amount enter an account title to record first lease payment enter a debit amount enter a credit amount (To record first lease payment.) choose a transaction date enter an account title to record interest enter a debit amount enter a credit amount enter an account title to record interest enter a debit amount enter a credit amount (To record interest.) choose a transaction date enter an account title to record amortization enter a debit amount enter a credit amount enter an account title to record amortization enter a debit amount enter a credit amount (To record amortization.) choose a transaction date enter an account title to record second lease payment enter a debit amount enter a credit amount enter an account title to record second lease payment enter a debit amount enter a credit amount (To record second lease payment.) choose a transaction date enter an account title to record interest enter a debit amount enter a credit amount enter an account title to record interest enter a debit amount enter a credit amount (To record interest.) choose a transaction date enter an account title to record amortization enter a debit amount enter a credit amount enter an account title to record amortization enter a debit amount enter a credit amount (To record amortization.) SHOW LIST OF ACCOUNTS Suppose Sweet received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right-of-use asset be affected? Right-of-use asset $enter a dollar amount Lease Liability $enter a dollar amount What if Sweet prepaid rent of $5,000 to Faldo? Right-of-use asset $enter a dollar amount Lease Liability $enter a dollar amount

Kieso, Intermediate Accounting, 17e Help System Announcements CALCULATOR PRIN Problem 21-01 The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Sweet Company, a lessee. January 1, $123,849 Commencement date Annual lease payment due at the beginning of each year, beginning with January 1, Residual value of equipment at end of lease term, guaranteed by the lessee Expected residual value of equipment at end of lease term Lease term Economic life of leased equipment Fair value of asset at January 1, Lessor's implicit rate Lessee's incremental borrowing rate $55,000 $50,000 6 years 6 years $653,000 8% 8 % The asset will revert to the lessor at the end of the lease term. The lessee uses the straight-line amortization for all leased equipment. Click here to view. factor tables Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal place final answers to o decimal places eg. 5,275.) SWEET COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability Annual Lease Payment Plus GRV Date Lease Liability 621494 1/1/20 $ $ 123849 497645 1/1/20 123849 # O BI earch ULIVILE E Portraits of Jesus Log In Brytewave e... MindTap.Cengage Lions Share Cengage Digitale... efollett Peason S , 17e Help System Announcements CALCULATOR PRINTER VERSION & RACK Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round present value factor calculations to 5 decimal place.g. 1.25124 and final answers to decimal places e.g. 5,275.) SWEET COMPANY (Lessee) Lease Amortization Schedule Interest on Reduction of Lease Liability Liability Annual Lease Payment Plus GRV Date Lease Liability 621494 1/1/20 1/1/20 123849 123849 497645 123849 39812 1/1/21 1/1/22 123849 123849 1/1/23 1/1/24 1/1/25 123849 123849 12/31/26 5000 SHOW LIST OF ACCOUNTS Prepare all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31. (Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is neque select "No Entry for the account titles and enter o for the amounts. Round answers to o decimal places e.g. 5,275. Record journal entries in the order pres the problem.) 2 GE O c arch JS Help System Announcements Anong, 17e CALCULATOS PRINTER VERSION Prepare all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annua accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is regu select "No Entry for the account titles and enter o for the amounts. Round answers to 0 decimal places e.g. 5,275. Record journal entries in the order pres the problem.) Date Account Titles and Explanation Debit Credit (To record the lease.) (To record first lease payment.) (To record interest.) (To record amortization.) (To record second lease payment.) O ED i G * c search Riese, Intermediate Accounting, 17e JS CALCULATOR PRINTER VERSION 4 BACK NEXT (To record amortization.) SHOW LIST OF ACCOUNTS Suppose Sweet received a lease incentive of $5,000 from Faldo Leasing to enter the lease. How would the initial measurement of the lease liability and right of use asset be affected? Right-of-use asset $ Lease Uability $ What if Sweet prepaid rent of $5,000 to Faldo? Right-of-use asset $ Lease Liability Click if you would like to Show Work for this question: Qen Show Work SHOW UST OF ACCOUNTS SUBMIT ANSWER SAVE OR LATEN Question Attempts: 0 of 2 used G di 10/11/2020 is O i # # search