On January 1, 2024, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King's sales revenue, with a quarterly sales minimum of $500,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous five-year period, Taco King has generated quarterly sales of over $700,000. Fogelman's interest rate, known by Taco King, was 4%. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of 51. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $3) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. 2. Prepare the journal entries for Taco King on April 1, 2024. First quarter sales were $710,000. Amortization is recorded quarterly.
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- On January 1, 2024, 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 $590,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous five-year period, Taco King has generated quarterly sales of over $745,000. Fogelman's interest rate, known by Taco King, was 8%. Note: Use Excel, or a financial calculator. Required: 1. Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. 2. Prepare the journal entries for Taco King on April 1, 2024. First quarter sales were $755,000, Amortization is recorded quarterly. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries for Taco King at the beginning of the lease on January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal…On January 1, 2021, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King's sales revenue, with a quarterly sales minimum of $520,000. 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 $710.000. Fogelman's interest rate, known by Taco King, was 4%. ( EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease at January 1, 2021. 2. Prepare the journal entries for Taco King at April 1, 2021. First quarter sales were $720,000. Amortization is recorded quarterly Required 1 Required 2 Prepare the journal entries for Taco King at the beginning of the lease at January 1, 2021. (If no entry is required for a transaction/event, select "No…On January 1, 2021, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King’s sales revenue, with a quarterly sales minimum of $400,000. 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 $650,000. Fogelman’s interest rate, known by Taco King, was 4%.Required:1. Prepare the journal entries for Taco King at the beginning of the lease at January 1, 2021.2. Prepare the journal entries for Taco King at April 1, 2021. First quarter sales were $660,000. Amortization is recorded quarterly.
- On January 1, 2021, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King's sales revenue, with a quarterly sales minimum of $520,000. 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 $710,000. Fogelman's interest rate, known by Taco King, was 4%. ( EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entries for Taco King at the beginning of the lease at January 1, 2021. 2. Prepare the journal entries for Taco King at April 1, 2021. First quarter sales were $720,000. Amortization is recorded quarterly Answer is not complete. Complete this question by entering your answers in the tabs below. Required 11 Required 2 Prepare the journal entries for Taco King at the beginning of the…Werner Chemical, Incorporated, leased a protein analyzer on September 30, 2024. The five-year lease agreement calls for Werner to make quarterly lease payments of $355,655, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Determine the present value of the lease payments on September 30, 2024. What pretax amounts related to the lease would Werner report in its balance sheet on December 31, 2024? What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2024? What pretax amounts related to the lease would Werner report in its statement of cash flows for the year…On January 1, 2018, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requiresquarterly variable lease payments equal to 3% of Taco King’s sales revenue, with a quarterly sales minimum of$400,000. Payments at the beginning of each quarter are based on previous quarter sales. During the previous5-year period, Taco King has generated quarterly sales of over $650,000. Fogelman’s interest rate, known by TacoKing, was 4%.Required:1. Prepare the journal entries for Taco King at the beginning of the lease at January 1, 2018.2. Prepare the journal entries for Taco King at April 1, 2018. First quarter sales were $660,000. Amortization isrecorded quarterly
- Martinez Equipment Leasing Company leased equipment to Cullumber Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $370000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Martinez Equipment Leasing and known to Cullumber Healthcare is 8%. Cullumber's incremental borrowing rate is 12%. The cost of the equipment on Martinez Equipment Leasing accounting records was $820000. Assuming that the lease is appropriately recorded as an operating lease, at what amount is the lease recorded on Cullumber Healthcare System's books on January 1, 2025? PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 12%, 4 periods 3.40183 3.03735 0.63552 no entry to record an operating lease. $1323527 $1480000 $789167Werner Chemical, Incorporated, leased a protein analyzer on September 30, 2024. The five-year lease agreement calls for Werner to make quarterly lease payments of $424,178, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Werner's incremental borrowing rate is 16%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the present value of the lease payments on September 30, 2024. 2. What pretax amounts related to the lease would Werner report in its balance sheet on December 31, 2024? 3. What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2024? 4. What pretax amounts related to the lease would Werner report in its statement of cash flows for the…On January 1 of Year 1, Yogart Inc. signed a 10-year lease for its retail outlet. The lease payments, paid semiannually each January 1 and July 1, are based upon semiannual sales and equal 5% of sales with a semiannual sales minimum of $2,500,000. Based on the previous three years, average sales per semiannual period are $3,000,000. Yogart's incremental borrowing rate is 6% and it is unaware of the rate implicit in the lease. The lease is classified as an operating lease by Yogart. The first semiannual payment of $125,000, calculated as 5% of $2,500,000, is due immediately on January 1 of Year 1. Yogart's accounting year ends June 30. Required a. Calculate the lease liability recorded by Yogart Inc. on January 1 of Year 1. • Note: Round your answers to the nearest whole dollar. Lease liability: $ 2,371,198 x b. Calculate the right-of-use asset recorded by Yogart Inc. on January 1 of Year 1. Right-of-Use Asset: $0. Lease Liability Schedule Date Jan. 1, Year 1 Jan. 1, Year 1 $ July 1,…
- On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgla-Atlantic to make semiannual lease payments of $414,921 over a five-year lease term (also the asset's useful life). payable each June 30 and December 31, with the first payment on June 30, 2024. Georgla-Atlantic's incremental borrowing rate is 8%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $3.5 million. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. What amount related to the lease would IC report in its balance sheet on December 31, 2024 (ignore taxes)? 2. What amount related to the lease would IC report in its income statement for the year ended December 31, 2024 (ignore taxes)? Note: For all requirements, enter your answers in whole dollars and not in millions. Round the…Wilson Foods Corporation leased a commercial food processor on September 30, 2018. The five-year finance lease agreement calls for Wilson to make quarterly lease payments of $326,290, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Wilson's incremental borrowing rate is 12%. Wilson records depreciation on a straight-line basis at the end of each fiscal year. Wilson recorded the lease as follows: September 30, 2018 Right-of-use asset (calculated below) Lease payable (calculated below) Lease payable Cash (first payment) Calculation of the present value of lease payments $326,290 × 15.32380*= $5,000,000 (rounded) *Present value of an annuity due of $1: n = 20, /= 3% Item Right-of-use asset Lease payments: 5,000,000 Principal Interest 326,290 Required: What would be the pretax amounts related to the lease that Wilson would report in its statement of cash flows for the year ended December 31, 2018? (Cash outflows should be indicated…On June 30, 2024, Clark, Incorporated leased warehouse equipment from Woodward, Incorporated. The lease agreement calls for Clark to make semiannual lease payments of $700,000 over a 2-year lease term (also the asset's useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Clark's incremental borrowing rate is 10%, the same rate Woodward used to calculate lease payment amounts. Woodward manufactured the equipment at a cost of $2,220,000. Lease date Semi-annual payments Lease term Payments per year Equipment's cost Clark's incremental borrowing rate 1. Determine the price at which Woodward is 'selling' the equipment (present value of the lease payments) using Excel's PV function. 2. Prepare the journal entry to record the sale by Woodward Incorporated on June 30, 2024. Date General Journal Debit June 30, 2024 3. Prepare an amortization schedule for the 2-year term of the lease. Date June 30, 2024 December 31, 2024 June 30, 2025 December 31, 2025…