CHAPTER 15 Leases 929 Refer to the situation described in E15–33. Required: Prepare a lease amortization schedule for the two-year term of the lease and appropriate entries for Edison Leasing from the beginning of the lease through December 31, 2016. December 31 is the fiscal year-end. Appropriate adjusting entries are recorded at the end of each quarter. Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $250,177. E 15–34 Lessor; amortization schedule; journal entries; Type A lease E 15–35 Lessee; journal entries; Type B lease Related Information: Lease term 2 years (8 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2016, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter Economic life of asset 5 years Interest rate charged by the lessor 8% Required: Prepare appropriate entries for Manufacturers Southern from the beginning of the lease through March 31, 2016. Appropriate adjusting entries are made quarterly. Refer to the situation described in E15–35. Required: Prepare appropriate entries for Edison Leasing from the beginning of the lease through March 31, 2016. Appropriate adjusting entries are made quarterly. American Food Services, Inc., leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2016. The lease agreement for the $4 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Barton and Barton’s implicit interest rate was is 10%. Required: 1. Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2016. 2. Prepare an amortization schedule for the four-year term of the lease. 3. Prepare the appropriate journal entries on December 31, 2016. 4. Prepare the appropriate journal entries on December 31, 2018. Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $250,177. Manufacturers Southern elected the short-term lease option. Appropriate adjusting entries are made annually. E 15–36 Lessor; journal entries; Type B lease E 15–37 Lessee; amortization schedule and journal entries; Type A lease E 15–38 Short-term lease Related Information: Lease term 1 years (4 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2016, and at Mar. 31, June 30, Sept. 30 Economic life of asset 5 years Interest rate charged by the lessor 8% Required: 1. Prepare appropriate entries for Manufacturers Southern from the beginning of the lease through December 31, 2016.
Spiceland_Inter_Accounting8e_Ch15
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