Financial Statement Impact of a Lease On January 1, 2008, Muske Trucking Company leased a…
Ace your studies with our custom writing services! We've got your back for top grades and timely submissions, so you can say goodbye to the stress. Trust us to get you there!
Order a Similar Paper Order a Different Paper
Financial Statement Impact of a Lease
On January 1, 2008, Muske Trucking Company leased a semitractor and trailer for five years.
Annual payments of $28,300 are to be made every December 31 beginning December 31, 2008.
Interest expense is based on a rate of 8%. The present value of the minimum lease payments
is $113,000 and has been determined to be greater than 90% of the fair market value of the
asset on January 1, 2008. Muske uses straight-line depreciation on all assets.
Required
1. Prepare a table similar to Exhibit 10-7 to show the five-year amortization of the lease obligation.
2. Prepare the journal entry for the lease transaction on January 1, 2008.
3. Prepare all necessary journal entries on December 31, 2009 (the second year of the lease).
4. Prepare the balance sheet presentation as of December 31, 2009, for the leased asset and the
lease obligation
Looking for top-notch essay writing services? We've got you covered! Connect with our writing experts today. Placing your order is easy, taking less than 5 minutes. Click below to get started.
Order a Similar Paper Order a Different Paper
