Question

Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2021. Courtney purchased the equipment from Doane Machines at a cost of $250,500, its fair value. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Related Information:
Lease term	2 years (8 quarterly periods)
Quarterly lease payments	$15,500 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter
Economic life of asset	5 years
Interest rate charged by the lessor	12%

Required:
Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2021. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter.

Record the appropriate adjusting entries at the end of each quarter for Baillie Power from the commencement of the lease through January 1, 2021. December 31 is the fiscal year end for each company. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to the nearest whole dollar.)

How to record on General Journal

Answer 1

fg0 Answers * Amortization schedule: 8 Lease balance at the beginning = 415,500x 1-C1+34) (1+31) 3). = $15,500 x7.23038 6.13!4=31 . 2x4=8 $83,966 $12,981 = $112,069. payment dease Effective decrease in date payment interest lease balance balance Hilal $112,069 Vilal $15,500 $96,569 3/31121 $15,500 2,897 $12,603 6/30121 +15,500 $2,519 $70,985 19/30/21 $15,500 2,130 $13,370 12/31/24 $15,500 $1,729 $13,771 $43,844 3/31/21 $15,500 $1,315 $14,185 $29,659 6130222 $15,500 $890 $14,610 $15,049 9/20122 $15,500 13451 |$15,049 180 Lease payment = $15,500 effective interest = 34. x previous lease balance decrcase in balance = dease payment - ef Gective interest $57,615 lease balance Previous lease balance-dec in balance.

Journal entrics : اكرا Date particulars Tani, Right of use of asset 2011 Lease payable Jan', Lcase payable 2021 Cash interest Expense lease payable cash mar 31, Amortization Expense Debites crediter? $112,069 $112,069 $15,500 $15,500 mar 31, anal $2,897 $ 12,603 $15,500 $12,603 2021 Right of use of asset $12,603 $2,519 $12,981 202) $15,500 $12,981 2021 $12,981 $2,130 Jun 30, interest Expense dease payable cash Sinc 30 Amortization Expense Right of use drasset interest xspense sep 30 22001 lease payable cash Sep 30, Amortization Expense 2021 Usc asst XC 31, interest Expense dease payable cach Dec 31, Amortization Expense $13,370 $15,500 $13,370 Right of $13,310 $1,729 $13,771 $15,500 $13,791 Right of use asset 613, 7:11