Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. act 3603 intermediate accounting ii 1. deer compan

ACT 3603 Intermediate Accounting II 1. Deer Company purchased a machine on January 1, 2018,...

60.1K

Verified Solution

Question

Accounting

ACT 3603 Intermediate Accounting II
1. Deer Company purchased a machine on January 1, 2018, for $3,000,000 for the express purpose of leasing it. The machine was expected to have an eight-year life from January 1, 2018, to have no salvage value, and to be depreciated on a straight- line basis. Deer leases the machine to Stick Company at a total rental of $2,100,000, payable in five annual installments in the following declining pattern; 24% in the first two years, 20% in the third and fourth years and 12% in the last year. The lease payment begins January 1, 2018. In addition to the rent, Stick is required to pay annual executor cost of $27,000 to cover unusual repairs and insurance. The lease does not qualify as capital lease for reporting purposes. Deer incurred initial direct costs of $18,000 in obtaining the lease.
Required: Provide all necessary entries to record the lease transactions for 2018 and 2022 on the books of
a) Deer Company
b) Stick Company

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A pharmacy student is testing six different drugs that target neuromuscular transmission. Predict if the following...

Medical Sciences
Q

The Project for Health, Wellness, and Self-Care focus on your self-awareness and reflection to identify your...

Psychology
Q

Spot size in lady bugs is controlled by one gene In a certain population there...

Biology
Q

The rate of breathing and O2 levels The rate of breathing would increase if O2...

Biology
Q

c A particle of mass 2 00 kg located at position 7 2 3 2k...

Physics
Q

13 1 point Write an explicit rule to represent the sequence 4 10 16 22...

Algebra
Q

Sultan Company uses an activity-based costing system. At the beginning of the year,...

Accounting
Q

For each separate company, compute cash flows from operations using the indirect method. Note: Amounts...

Accounting
Q

One-year Treasury bills currently earn 2.10 percent. You expect that one year from now, 1-year...

Accounting
Q

I already knew how to solve this problem. I just need to confirm some variables...

Finance
Q

Robin is single and maintains a household for her two dependent children who are ages...

Accounting
Q

Currently the May 15th at-the-money call option on company XYZ with a strike price of...

Finance