Straight Line
Effective Interest
Lessor and Lessee Journal Entries
Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and write an analysis directed toward the team at Fifth-Third Leasing Company describing what the numbers mean and how they relate to the business. Submit journal entries in an Excel file and written segments in an MS Word document. For written answers, please make sure your responses are well- written, formatted per CSU-Global Guide to Writing and APA e and have proper citations, where applicable. Assume that the following facts pertain to a non-cancelable lease agreement between Fifth-Third Leasing Company and Bob Evans Farms, a Lessee. Inception date January 1, 2018 Residual value of equipment at end of lease term, guaranteed by the lessee $100,000 Lease term 6 years Economic life of leased equipment Fair value of asset at January 1,2017 Lessor's implicit rate Lessee's incremental borrowing rate 8 years $800,000 1096 12% The lessee assumes responsibility for all executory costs, which are expected to amount to $4,000 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $50,000. The lessee uses the straight-line depreciation method for all equipment. 1. Using the spreadsheet Lease Amort Schedule, prepare an amortization schedule that would be suitable for the lessee for the lease term. 2. Using the spreadsheet Journal Entries, prepare the journal entries for the lessee for 2018 and 2019 to record the lease agreement and all expenses related to the lease. Assume the Lessee's annual accounting period ends on December 31 and that reversing entries are used when appropriate 3. Prepare journal entries for the lessor of the transaction Student's Name Module NumberOption Name of Company Carrying Amount of Lease Initial Lease amount Interest Income Date Name of Company Student's Name Initial Lease Amount Interest Prircipal Carrying Amount of Lease Module Number Option Name of Compary Student's Name Prepare the joumal entres to recond transactions es requred. Lessor Lessee Tite Amourt Account Titie Provide a one-ine expianation for the reason why the jourmal entry has been Provide a one ine explanation for the reason why the joumal entry has been made Amourt Account Tte Account Title Provide a cre-ine expnation for tine reason why the ournal entry has been Provide a one-ine explanstion for the reason why the jounal entry has been made Amount Amount Account Tite Account Titie Provide a one-ine explanation for the reason why the journal entry has been Amount Amount 2 Provide a one-line explanation for the reason why the journal entry has been made Account T a one-ine explanation for the reason why the journal entry has been 7 Provide a ono-line explanation for the reason why the journal entry hos been made Account Ttae Provide a one-ine explanahion for the season why the youmal entry has been 33 Povde a one line explanation for the resson why the yournal entry has eeace -one ine expianation for the neason why the purnal entry has been made 9 Provide a one-ine explanation for the reason why the journal entry nas been made * You may add additional rows as needed Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and write an analysis directed toward the team at Fifth-Third Leasing Company describing what the numbers mean and how they relate to the business. Submit journal entries in an Excel file and written segments in an MS Word document. For written answers, please make sure your responses are well- written, formatted per CSU-Global Guide to Writing and APA e and have proper citations, where applicable. Assume that the following facts pertain to a non-cancelable lease agreement between Fifth-Third Leasing Company and Bob Evans Farms, a Lessee. Inception date January 1, 2018 Residual value of equipment at end of lease term, guaranteed by the lessee $100,000 Lease term 6 years Economic life of leased equipment Fair value of asset at January 1,2017 Lessor's implicit rate Lessee's incremental borrowing rate 8 years $800,000 1096 12% The lessee assumes responsibility for all executory costs, which are expected to amount to $4,000 per year. The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $50,000. The lessee uses the straight-line depreciation method for all equipment. 1. Using the spreadsheet Lease Amort Schedule, prepare an amortization schedule that would be suitable for the lessee for the lease term. 2. Using the spreadsheet Journal Entries, prepare the journal entries for the lessee for 2018 and 2019 to record the lease agreement and all expenses related to the lease. Assume the Lessee's annual accounting period ends on December 31 and that reversing entries are used when appropriate 3. Prepare journal entries for the lessor of the transaction Student's Name Module NumberOption Name of Company Carrying Amount of Lease Initial Lease amount Interest Income Date Name of Company Student's Name Initial Lease Amount Interest Prircipal Carrying Amount of Lease Module Number Option Name of Compary Student's Name Prepare the joumal entres to recond transactions es requred. Lessor Lessee Tite Amourt Account Titie Provide a one-ine expianation for the reason why the jourmal entry has been Provide a one ine explanation for the reason why the joumal entry has been made Amourt Account Tte Account Title Provide a cre-ine expnation for tine reason why the ournal entry has been Provide a one-ine explanstion for the reason why the jounal entry has been made Amount Amount Account Tite Account Titie Provide a one-ine explanation for the reason why the journal entry has been Amount Amount 2 Provide a one-line explanation for the reason why the journal entry has been made Account T a one-ine explanation for the reason why the journal entry has been 7 Provide a ono-line explanation for the reason why the journal entry hos been made Account Ttae Provide a one-ine explanahion for the season why the youmal entry has been 33 Povde a one line explanation for the resson why the yournal entry has eeace -one ine expianation for the neason why the purnal entry has been made 9 Provide a one-ine explanation for the reason why the journal entry nas been made * You may add additional rows as needed
