Date Account Titles and Explanation Debit Credit 1/1/17 (To record receipt of le
ID: 2339798 • Letter: D
Question
Date
Account Titles and Explanation
Debit
Credit
1/1/17
(To record receipt of lease payment)
12/31/17
(To record depreciation expense on the leased asset)
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(b)
Date
Account Titles and Explanation
Debit
Credit
1/1/17
(To record the lease)
1/1/17
(To record lease liability)
12/31/17
Exercise 21A-17 a-c (Part Level Submission)
On January 1, 2017, Larkspur Co. leased a building to Crane Inc. The relevant information related to the lease is as follows.
Both the lessor and the lessee are on a calendar-year basis.
Your answer is correct. Prepare the journal entries that Larkspur should make in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)Date
Account Titles and Explanation
Debit
Credit
1/1/17
(To record cost of the building)(To record receipt of lease payment)
12/31/17
(To record the recognition of the revenue each period)(To record depreciation expense on the leased asset)
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Attempts: 1 of 3 usedExplanation / Answer
Journal Entries in the books of Larkspur Date Particulars Debit Credit 1//1/17 building a/c Dr 4400000 to cash 4400000 (to record cost of building) 01-01-2017 cash a/c Dr 260000 to unearned rent revenue 260000 (to record receipt of lease payment) 31-12-2017 unearned rent revenue a/c Dr 260000 to Rent revenue 260000 ( to record the recoginition of revenue) 31-12-2017 Depreciation exp a/c Dr (4400000/50) 88000 Accumulated Dep - Building 88000 (to record dep exp on leased assets) b) Journal entries in the books of Crane Particulars Debit Credit 01-01-2017 Repayment a/c Dr 260000 to Bank 260000 ( to record lease payment made for lessor) 31-12-2017 lease expenses a/c Dr 260000 to prepayment 260000 (lease charges for the year)
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