Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company and Skysong Company, a lessee. Commencement date June 1, 2020 Annual lease
The following facts pertain to a non-cancelable lease agreement between Sheridan Leasing Company and Skysong Company, a lessee. Commencement date June 1, 2020 Annual lease payment beginning with June 1, 2020 $46,919.69 Bargain purchase option price at end of lease term $12,200 Lease term 4 years Economic life of leased equipment (no salvage value) 12 years Lessor's cost $162,000 Fair value of asset at June 1, 2020 $181,999.99 Lessor's implicit rate (known to lessee) 6 % Lessee's incremental borrowing rate 6 % The collectibility of the lease payments by Sheridan is probable. (c) Prepare a lease amortization schedule for Skysong for the 4-year lease term. (Round answers to 2 decimal places, e.g. 5,275.15.) SKYSONG COMPANY (Lessee) Lease Amortization Schedule Annual Lease Payment Plus BPO Interest on Liability Reduction of Lease Liability Date Lease Li 6/1/20 $ $ $ $ 6/1/20 6/1/21 6/1/22 6/1/23 5/31/24 $ $ $ Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2020 and 2021. Skysong's annual accounting period ends on December 31. Reversing entries are used by Skysong. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, eg. 5,275.15. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record the lease) (To record the first lease payment)
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