y & Practice Gradebook ORION eTextbook Assignment Brief Exercise 20-20 Your answ

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y & Practice Gradebook ORION eTextbook Assignment Brief Exercise 20-20 Your answer is partialy correct. Try again. Sandhil Corp. agreed to lease property from Sunland Corp. effective January 1, 2017, for an arnual paymernt of $25,548, begineing January 1, 2017. The property is made up d dual al ethi inglitin eet rats land ith a fair value of $110,000 ad a t o- tu rey office buiding ith a tar value d si76,000 and areu HeZ-s w ith .5%, the lease term is 21 years, and title to the property is transferred to Sandhill at the end of the lease term Prepare the required entries made by Sandhil Corp. on January 1, 2017 and at its year md are automatically indentedf when the amount is entered. Do not indent masually. If no entry is or of December 31, 2017. Both Sandhil and Sunland use ASPE. (Credit accoont titles required, select "No Entry" for the account titles and enter O for the amounts. Round arswers to 0 decimal places, e.g. 5,275.) udy Debit Cdt Date Account Tities and Explanation (To record inception of lease) To record irst lease payment 018-03-25 e to search

Explanation / Answer

Working: The lease payment schedule is given below.

Books of Sandhill Corp. Date Account Title Debit Credit Jan.1. 2017 Land Under Lease 110000 Buildings Under Lease 176000 Lease liability 286000 (When the lease agreement is done) Lease Liability 25548 Cash 25548 (On the first leaese rental payment) Dec.31,2017 Interest Expense 19534 Interest Payable 19534 (At the end of first year of lease) Dec.31,2017 Depreciation Expense 8381 Accumulated Depreciation - Buildings 8381 (Deprecitaon expense on the leased asset) Jan.1,2018 Lease liability 6014 Interest Payable 19534 Cash 25548 (On the second lease rental payment)

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