Question

Warren Marina owns a large marina that contains numerous boat slips of various sizes. Warren contracts with boat owners to provide slips to house the customers’ boats. Lucky Fisherman Fleet contracted with Warren to provide space for four of its fishing boats. The contract specifies that Lucky Fisherman’s boats will be kept in identified slips in the marina. However, Warren has the right to shift the boats to other slips within its marina at its discretion, subject to the requirement to provide 45-foot slips per boat for a three-year period. Warren frequently rearranges its customers’ boats to meet the needs of new contracts. Costs of reallocating space is low relative to the benefits of being able to accommodate more customers and their specific requests. Lucky Fisherman Fleet paid $21,500 on March 1, 2021, for the first year’s accommodations. The market rate of interest is 8%.

Required:

Prepare the appropriate entry(s) for Lucky Fisherman Fleet at March 1, the commencement of the agreement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Answer ► journal Ent guy for first payment on march 1, 2021 Accommdonation rent alccor) carton martina alc dx 21500 to bank atc & 21,500 (Beira accomodation sent paid for 1st year to warren marina) This entry is for first year - future payments Entry will be same Only amount will change as follows → for Second year payment amount coll Be = $ 21, 500 XFV (841) = $ 23060) 22060 for zod year = $ 21,300x fv(84.a) CS comped with [ = $ 24745 Scanned with CamScanner