Entries of operating lease and capital lease

Reference no: EM1357244

Presented below are two independent situations.

1. Josh Car Rental leased a car to Bayfield Company for one year. Terms of the operation lease agreement call for monthly payments of $500.

2. On January 1, 2008, James Inc. entered into an agreement to lease 20 computers from Marcus Electronics. The terms of the lease agreement require three annual rental payments of $30,000 (including 10% interest) beginning December 31, 2008. The present value of the three rental payments is $74,606. Josh considers this a capital lease.

Instructions

a) Prepare the appropriate journal entry to be made by Bayfield Company for the first lease payment

b) Prepare the journal entry to record the lease agreement on the books of Josh inc. on January 1, 2008

Please be as accurate as possible, and the answer should be within in the operating and capital lease topic.

Reference no: EM1357244

Questions Cloud

Explain zaturn will compete in the same market as crunz : Explain Zaturn will compete in the same market as Crunz and the annual fixed costs for this brand are expected to be $40 million

Social psychology effects in the workplace : In terms of social psychology, this posting offers ideas related to these topics:

Calculate the opportunity cost : Sporty Corporation a sport machine manufacturer, is considering a new project that will take advantage of excess capacity in an existing plant. The plant has a capacity to create 50,000 tennis rackets, but only 25,000 are currently being produced.

Elucidate why the boundaries of the firms that group members : Elucidate why the boundaries of the firms that group members currently work for are dawn at their current limits, and consider whether there are opportunities to increase the returns generated.

Entries of operating lease and capital lease : Prepare the appropriate journal entry to be made by Bayfield Company for the first lease payment. Prepare the journal entry to record the lease agreement on the books of Josh inc. on January 1, 2008

Examine the relationship between water rights and society : Find three cases in three different regions of the world where issues have arisen in relation to people's access to safe sources of water. You will likely find that many such issues are political disputes over water rights.

Find standard deviation of a portfolio : Suppose you put half of your fund in a stock that has an expected return of 14% and a standard deviation of 24 percent. You put the rest of your money in another stock that has an expected return of 6% and a standard deviation of 12 percent.

Illustrate what might be the long run effect of raising : explain why the tax would be placed on gasoline rather than, say yachts. Illustrate what might be the long run effect of raising the price of gas.

Bilateral kidney infection : Mr. E develops acute kidney failure because of severe bilateral kidney infection.

User Account

All Pages