90.2K

Verified Solution

Link Copied!

Rumsfeld Corporation leased a machine on December 31, 2018. for a three-year period. The lease agreement calls for annual payments in the amount of $19,500 on December 31 of each year beginning on December 31, 2018. Rumsfeld has the option to purchase the machine on December 31, 2021, for $23,500 when its fair value is expected to be $33,500. The machine's estimated useful life is expected to be four years with no residual value. The appropriate interest rate for this lease is 8%. n/iPV of $1 92593 85734 79383 PV, ordinary annuity PV, annuity due 1 period, 8% 2 periods, 8% 3 periods, 8% 1.88868 1.92593 2.78326 92593 1.78326 2.57718 Requlrec 1. Calculate the amount to be recorded as a right-of-use asset and the associated lease payable 2. Prepare Rumsfeld's journal entries for this lease for 2018 and 2019. Complete this question by entering your answers in the tabs below Required 1Required 2 Calculate the amount to be recorded as a right-of-use asset and the associated lease payable. (Round your answer to the nearest whole dollar amounts. Required 1 Required 2> Rumsfeld Corporation leased a machine on December 31, 2018. for a three-year period. The lease agreement calls for annual payments in the amount of $19,500 on December 31 of each year beginning on December 31, 2018. Rumsfeld has the option to purchase the machine on December 31, 2021, for $23,500 when its fair value is expected to be $33,500. The machine's estimated useful life is expected to be four years with no residual value. The appropriate interest rate for this lease is 8%. n/iPV of $1 PV, ordinary annuityPV, annuity due 1 period, 8% 2 periods, 8% 3 periods, 8% 92593 85734 79383 92593 1.78326 2.57718 1.88888 1.92593 2.78326 Requlrec: 1. Calculate the amount to be recorded as a right-of-use asset and the associated lease payable. 2. Prepare Rumsfeld's journal entries for this lease for 2018 and 2019. Complete this question by entering your answers in the tabs below Required 1Required 2 Prepare Rumsfeld's journal entries for this lease for 2018 and 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list 1 Record the lease. Record the cash payment. Record the cash payment. Record the amortization expense 2 3 4

Answer & Explanation Solved by verified expert

See Answer