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Record amortization of the right-of-use asset for Taco King

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Reference no: EM133059188

Question - On January 1, 2021, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 2% of Taco King's sales revenue, with a quarterly sales minimum of $410,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous 5-year period, Taco King has generated quarterly sales of over $655,000. Fogelman's interest rate, known by Taco King, was 8%.

Required -

1. Record the beginning of the lease for Taco King.

2. Record amortization of the right-of-use asset for Taco King.

Reference no: EM133059188

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