Southwestern Edison Hi-Tech Leasing Journal entries for 2018
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Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $90,000.
Other information:
Lease term 3 years
Annual payments $40,000 on January 1 each year
Life of asset 3 years
Fair value of asset $111,332
Implicit interest rate 8%
Incremental rate 8%
There is no expected residual value.
Prepare appropriate journal entries for Hi-Tech Leasing for 2018. Assume a December 31 year-end. Round your answers to the nearest whole dollar amounts.
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Solution Summary
Excel file with solution mapped out. Click in cells to see computations. Includes loan amortization schedule for life of lease.
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
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