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QUESTION: Prepare all the journal entries for four years. On January 1, 2020. ABC Co. leased a machinery to XYZ Co. with the following details:
QUESTION: Prepare all the journal entries for four years. On January 1, 2020. ABC Co. leased a machinery to XYZ Co. with the following details: Cost of machinery to the lessor 3.760,100 Residual value guarantee 400,000 Annual rental payable at the beginning of each year starting January 1, 2020? Initial direct cost incurred by the lessee 250.000 Useful life and lease term 4 years Implicit interest rate 10% Present value of an annuity due of 1 for 4 years at 10% 3.4869 Present value of 1 for 4 years at 10% 0.6830 At the beginning of 2021, XYZ Co. subleased the equipment to MNO Co. where risk and rewards are substantially transferred to the new lessee, with the following details: Annual rental payable at the end of each year starting December 31, 2021 1,100,000 Initial direct cost incurred by the lessee 250,000 Lease term Implicit interest rate 10% Present value of an ordinary annuity of 1 for 3 years at 10% 2.50 Present value of 1 for 3 years at 10% 0.75 3 years Required: Answer the following under the point of view of ABC, XYZ and MNO Companies. On January 1, 2020. ABC Co. leased a machinery to XYZ Co. with the following details: Cost of machinery to the lessor 3.760,100 Residual value guarantee 400,000 Annual rental payable at the beginning of each year starting January 1, 2020? Initial direct cost incurred by the lessee 250.000 Useful life and lease term 4 years Implicit interest rate 10% Present value of an annuity due of 1 for 4 years at 10% 3.4869 Present value of 1 for 4 years at 10% 0.6830 At the beginning of 2021, XYZ Co. subleased the equipment to MNO Co. where risk and rewards are substantially transferred to the new lessee, with the following details: Annual rental payable at the end of each year starting December 31, 2021 1,100,000 Initial direct cost incurred by the lessee 250,000 Lease term Implicit interest rate 10% Present value of an ordinary annuity of 1 for 3 years at 10% 2.50 Present value of 1 for 3 years at 10% 0.75 3 years Required: Answer the following under the point of view of ABC, XYZ and MNO Companies
QUESTION: Prepare all the journal entries for four years.
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