Answered step by step
Verified Expert Solution
Question
1 Approved Answer
September 30, 2021, the company leased a delivery truck to a local florist, Anything Grows. The fiscal year for both companies ends December 31 .
September 30, 2021, the company leased a delivery truck to a local florist, Anything Grows. The fiscal year for both companies ends December 31 . The lease agreement specified quarterly payments of $3,300 beginning September 30,2021 , the beginning of the lease, and each quarter (December 31, March 31, and June 30) through June 30, 2024 (three-year lease term). The florist had the option to purchase the truck on September 29, 2023, for $6,600 when it was expected to have a residual value of $10,900. The estimated useful life of the truck is four years. Mid-South Auto Leasing's quarterly interest rote for determining payments was 3% (opproximately 12% annually) Mid-South paid $27,520 for the truck. Both companies use straight-line depreciation or amortization. Anything Grows' incremental interest rate is 12% Prepare the appropilate entries for Anything Grows and Mid-South on September 29, 2023, assuming the purchase option was exercised on that date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started