Work Shown

On December 31, 2024, Rhone-Metro Industries leased equipment to Western Soya Company for a four-year period ending Decembe 31,2028 , at which time possession of the leased asset will revert back to Rhone-Metro. - The equipment cost Rhone-Metro $644,708 and has an expected useful life of six years. - Its normal sales price is $644,708. - The lessee-guaranteed residual value on December 31,2028 , is $25,000. - Equal payments under the lease are $180,000 and are due on December 31 of each year. - The first payment was made on December 31, 2024. - Western Soya's incremental borrowing rate is 10%. - Western Soya knows the interest rate implicit in the lease payments is 10%. - Both companies use straight-line depreciation or amortization. Note: Use tables, Excel, or a financial calculator. Use (FV of \$1. PV of \$1. FVA of \$1. PVA of \$1. FVAD of \$1 and PVAD of \$1) Required: 1. Show how Rhone-Metro calculated the $180,000 annual lease payments. 2. How should this lease be classified (a) by Western Soya Company (the lessee) and (b) by Rhone-Metro Industries (the lessor)? 3. Prepare the appropriate entries for both Western Soya Company and Rhone-Metro on December 31,2024. 4. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee and the lessor. 5. Prepare all appropriate entries for both Western Soya and Rhone-Metro on December 31, 2025 (the second lease payment and amortization). 6. Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 31, 2028, assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. Show how Rhone-Metro calculated the $180,000 annual lease payments. Prepare the appropriate entries for Western Soya Company on December 31,2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Note: Enter debits before credits. Prepare the appropriate entries for Western Soya Company on December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Note: Enter debits before credits. repare the appropriate entries for Rhone-Metro on December 31,2024 . Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet 2 Note: Enter debits before credits. Prepare the appropriate entries for Rhone-Metro on December 31,2024 . Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee. Note: Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessor. Note: Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values. Complete this question by entering your answers in the tabs below. Prepare all appropriate entries for Western Soya on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare all appropriate entries for Western Soya on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your inte and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare all appropriate entries for Rhone-Metro on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your it and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare the appropriate entries for Western Soya on December 31,2028 assuming the equipment is returned to Rhone-Metr actual residual value on that date is $1,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Prepare the appropriate entries for Western Soya on December 31, 2028 assuming the equipment is returned to Rhone-Metro an actual residual value on that date is $1,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your inter and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Prepare the appropriate entries for Rhone-Metro on December 31,2028 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermed and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. On December 31, 2024, Rhone-Metro Industries leased equipment to Western Soya Company for a four-year period ending Decembe 31,2028 , at which time possession of the leased asset will revert back to Rhone-Metro. - The equipment cost Rhone-Metro $644,708 and has an expected useful life of six years. - Its normal sales price is $644,708. - The lessee-guaranteed residual value on December 31,2028 , is $25,000. - Equal payments under the lease are $180,000 and are due on December 31 of each year. - The first payment was made on December 31, 2024. - Western Soya's incremental borrowing rate is 10%. - Western Soya knows the interest rate implicit in the lease payments is 10%. - Both companies use straight-line depreciation or amortization. Note: Use tables, Excel, or a financial calculator. Use (FV of \$1. PV of \$1. FVA of \$1. PVA of \$1. FVAD of \$1 and PVAD of \$1) Required: 1. Show how Rhone-Metro calculated the $180,000 annual lease payments. 2. How should this lease be classified (a) by Western Soya Company (the lessee) and (b) by Rhone-Metro Industries (the lessor)? 3. Prepare the appropriate entries for both Western Soya Company and Rhone-Metro on December 31,2024. 4. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee and the lessor. 5. Prepare all appropriate entries for both Western Soya and Rhone-Metro on December 31, 2025 (the second lease payment and amortization). 6. Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 31, 2028, assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. Show how Rhone-Metro calculated the $180,000 annual lease payments. Prepare the appropriate entries for Western Soya Company on December 31,2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Note: Enter debits before credits. Prepare the appropriate entries for Western Soya Company on December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Note: Enter debits before credits. repare the appropriate entries for Rhone-Metro on December 31,2024 . Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet 2 Note: Enter debits before credits. Prepare the appropriate entries for Rhone-Metro on December 31,2024 . Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessee. Note: Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule(s) describing the pattern of interest over the lease term for the lessor. Note: Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values. Complete this question by entering your answers in the tabs below. Prepare all appropriate entries for Western Soya on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare all appropriate entries for Western Soya on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your inte and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare all appropriate entries for Rhone-Metro on December 31, 2025 (the second lease payment and amortization). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your it and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare the appropriate entries for Western Soya on December 31,2028 assuming the equipment is returned to Rhone-Metr actual residual value on that date is $1,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Prepare the appropriate entries for Western Soya on December 31, 2028 assuming the equipment is returned to Rhone-Metro an actual residual value on that date is $1,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your inter and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits. Prepare the appropriate entries for Rhone-Metro on December 31,2028 assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,000. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermed and final answers to nearest whole dollar. Journal entry worksheet Note: Enter debits before credits