Dec 31 Purchased new equipment for P750,000, paying P150,000 cash and signing a 3-year, 7% note for the remainder. The note will be paid in three cqual, annual installments of P200,000 starting December 31, 2022. Dec 31 Honored warranty contracts on 12 units for a total cost of P11,500. Coverage for 30 units have expired from the warranty contracts included in the December 1 balance. Repair costs for these units were estimated at P675. Requirements: a. Journalize each transaction and prepare the necessary adjusting entries. b. Prepare the liabilities section of the balance sheet for the year ended December 31, 2021.
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- On May 1, 2021, ABC Company leased furniture and fixtures from XYZ Company under a one-year contract. The lease payments are as follows: First 2 months at P12,000 per month Next 4 months at P18,000 per month Next 3 months at P15,000 per month Last 3 months at P10,000 per month After the first year, the rent continues at P8,000 per month. What are the amounts reported in ABC financial statements for the year 2021?On September 1, 2021, Fantastic Company leased furniture and fixtures from Gorgeous Company under a one-year contract. The lease payments are as follows: First 6 months at 12,000 per month; next 6 months at 8,000 per month. How much is the rent expense for the year ended December 31, 2021?The GAP Inc. discloses the following schedule to its fiscal 2018 (ended February 2, 2019) 10-K report relating to its leasing to its leasing activities. Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places. The aggregate minimum noncancelable annual lease payments under leases in effect on February 2, 2019, are as follows: Fiscal Year ($ millions) 2019 $1,098 2020 1,043 2021 847 2022 694 2023 512 Thereafter Total minimum lease commitments $5,638 1,444 Compute the present value of GAP's operating leases using the following assumptions Assmption Discount rate Round remaining lease term to the nearest whole year Year Present Value 1 $ 0 2 0 3 0 4 0 5 0 >5 0 $ 0 6%
- On July 1, 2020, Shroff Company leased a warehouse building under a 10-year lease agreement. The lease requires quarterly lease payments of $4,500. The first lease payment is due on September 30, 2020. The lease was reported as a finance lease using an 8% annual interest rate. a. Prepare the journal entry to record the commencement of the lease on July 1, 2020. b. Prepare the journal entries that would be necessary on September 30 and December 31, 2020. c. Post the entries from parts a and b in their appropriate T-accounts. d. Prepare a financial statement effects template to show the effects template to show the effects of the entries from parts a and b on the balance sheet and income statement.Company must determine the December 31, 2020year-end accruals for advertising and rent expenses. A P5,000 advertising bill was received January7, 2021. It related to cost of P3,750 for advertisements in December 2020 issues and P1,250 for advertisements in January2021issues of the newspaper. A store lease, effective December 16, 2020c alls for fixed rent of P12,000 per month, payable one month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P3,000,000 per calendar year is payable on January31 of the following year. Net sales for 2020were P5,500,000. In its December31, 2020 balance sheet, company should report accrued liabilities ofAsap
- Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $101,000. Manufacturers Southern's fiscal year ends December 31. Required:1. Show how International Machines determined the $18,000 quarterly lease payments.2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.On January 1, Haymark Corporation signs a six-year lease for a truck that is accounted for as a finance lease. The lease requires six $15,252 lease payments (the first at the beginning of the lease and the rest at December 31 of years 1 through 5). The present value of the six annual lease payments, at 6% interest, is $79,500. The lease payment schedule follows. (a) Prepare the January 1 journal entry at the start of the lease to record any asset or liability. (b) Prepare the January 1 journal entry to record the first $15,252 cash lease payment.(a) Prepare the January 1 journal entry at the start of the lease to record any asset or liability. (b) Prepare the January 1 journal entry to record the first $15,252 cash lease payment. (b) Prepare the journal entry to record the cash lease payment at the end of Year 1 and the end of Year 2. (c) Prepare the journal entry made at the end of each year to record straight-line amortization, assuming zero salvage value at the end of the six-year…On April 1, 2019, Golden State Company leased a delivery truck from Warriors Company under a five-year operating lease. Total rent for the term of the lease will be payable as follows; First 9 months at P200,000/mo. 100,000/mo. 80,000/mo. 50,000/mo. 70,000/mo. Next 18 months at Next 12 months at Last 14 months at Last 7 months at How much should Golden State Company report as rent expense for the year ended December 31, 2019?
- On September 30, 2021, Ferguson Imports leased a warehouse. Terms of the lease require Ferguson to make 10 annual lease payments of $55,000 with the first payment due immediately. Accounting standards require the company to record a lease liability when recording this type of lease. Assuming an 8% interest rate, at what amount should Ferguson record the lease liability on September 30, 2021, before the first payment is made?Saved Abert, Inc. signed a five year lease of equipment on January 1, 2021. The lease was classified as an operating lease and has a 7% implicit interest rate. The lease agreement specifies five payments of $20,000 beginning January 1, 2021, and at each December 31st from 2021-2024. At January 1. 2021, Abert recorded a right-of-use asset and lease payable for $87,744. When adjusting the books at December 31, 2021, what amount of amortization expense should Abert record for the right-of-use asset? Multiple Choice $20,000 $13,858 O $17,200 $15,258On January 1, 2019, Solitaire Company leased equipment for 7 years. The lease is correctly classified as an operating lease by the lessor. The lease required an annual payment of $25,000 each for the first 4 years and an annual payment of $15,000 each for the remaining years. The lease agreement required Solitaire Company to pay $5,000 as annual insurance premium. On December 31, 2019, Solitaire Company paid $3,800 for repairs. Which of the following amounts was recorded as the rental revenue by the lessor at the end of Year 5? A. $20,000 B. $15,000 C. $25,000 D. $18,800