e Rome·FAFSA on th.. p NYS Higher Educatio. nie Il Pay Gas-National Gri..204 Ren
ID: 2540388 • Letter: E
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e Rome·FAFSA on th.. p NYS Higher Educatio. nie Il Pay Gas-National Gri..204 Rent ew part 2 Hel On January 1, 2018, Rick's Pawn Shop leased three years. Rick's had no significant economic incentive Annual lease payments are $19,00 due on Decembe agreement is considered an operating lease. (FV of $1, PV of $1, FVA of S1. PVA of $1, FVAD of $1 and PVAD of S) (Use appropriate factor(s) from the tables provided.) truck from Chumley Motors for a six-year period with an option to extend the lease for as of the beginning of the lease to exercise the 3-year extension option. r 31 of each year, calculated by the lessor using a 5% interest rate. The Required 1. Prepare Rick's journal entry to record for the right-of-use asset and lease liability at January 1, 2018. 2. Prepare the journal entries to record interest and amortization at December 31, 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare Rick's journal entry to record for the right-of-use asset and lease liability at January 1, 2018. (If no entry is for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) Journal entry worksheet Prev 1015111 Next >Explanation / Answer
1. No journal entry required at start of lease
2. Lease expense A/c Dr. 19,000
To Cash A/c 19,000
The payment is directly taken to income statement of lessee as it is an operating lease.
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