Ask Question
BusinessBusiness
21 March, 15:54

On January 1, Lorraine, Inc., entered into a lease contract. The lease contract was a ten-year lease for a computer with $16,000 annual lease payments due at the end of each year. Lorraine took possession of the computer on January 1. The present value of the lease payments under the lease contract is $117,761. Prepare the journal entry for this lease on January 1

+5
Answers (1)
  1. 21 March, 18:27
    0
    Right of Use Asset - Computer $117,761 (debit)

    Lease Liability$117,761 (credit)

    Explanation:

    The Lease period is more than 12 months, thus this type of lease is called finance lease.

    Lorraine, Inc must recognise the Right of Use of the Computer and the Lease Liability at the inception of the lease.

    The lease liability is measured at the Present Value of lease payments of $117,761. Right of Use Asset is measured at the Fair Value of Lease Liability of $117,761.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On January 1, Lorraine, Inc., entered into a lease contract. The lease contract was a ten-year lease for a computer with $16,000 annual ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
In one year, 50 bowling alleys opened in California. During that same year, ESPN started broadcasting professional bowling on TV, which sparked more interest in the sport.
Answers (1)
A (n) has a set payment schedule to pay off the debt
Answers (1)
Which option lists the steps to generate a weather forecast in the correct order?
Answers (1)
In the body of a professionally formatted business email, where should a request be placed? A. in the first sentence of the body of your email B. immediately following the reasons for your request at the end of the body, C.
Answers (1)
Schurz Corporation's management reports that its average delivery cycle time is 24 days, its average throughput time is 14.0 days, its manufacturing cycle efficiency (MCE) is 0.20, its average move time is 0.5 day, and its average queue time is 3.
Answers (1)
New Questions in Business
On March 15, Year 1, Kathleen Corp. adopted a plan to accumulate $1,000,000 by September 1, Year 5. Kathleen plans to make 4 equal annual deposits to a fund that will earn interest at 10% compounded annually.
Answers (1)
A natural monopoly's preemption of entry by other firms by exploiting its economies of scale is an example of
Answers (2)
The best way for a franchisee and franchisor to evaluate each other is Question options: for the potential franchisee to go to a sales presentation. for the potential franchisee to spend time working in a franchise location.
Answers (1)
Ronald Reagan believed that reducing income tax rates would A. raise economic well-being and perhaps even tax revenue. B. lower economic well-being, even though tax revenue could possibly increase. C. do little, if anything, to encourage hard work.
Answers (1)
Unlike niche-oriented shopping bots, broad-based shopping bots: select one: a. give pricing power to the retailers. b. search for prices for only one type of product. c. operate using a yellow pages type of model. d.
Answers (1)
Home » Business » On January 1, Lorraine, Inc., entered into a lease contract. The lease contract was a ten-year lease for a computer with $16,000 annual lease payments due at the end of each year. Lorraine took possession of the computer on January 1.
Sign Up Forgot Password?