Mgmt 200 Assignment Soln 4-9-10

Mgmt 200 Assignment Soln 4-9-10 - 3 2009 Dec 31 Lease...

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Management 200 – Introductory Financial Accounting– Spring 2010 Krannert School of Management - Purdue University Solutions to class assignment for April 9, 2010 Problem 10-5 Financial Statement Impact Of A Lease 1. Col. 1 Col. 2 Col. 3 Col. 4 Lease Interest Reduction of Lease Date Payment Expense Obligation Obligation 8% Col. 1 – Col. 2 01/01/08 113,000 12/31/08 28,300 9,040 19,260 93,740 12/31/09 28,300 7,499 20,801 72,939 12/31/10 28,300 5,835 22,465 50,474 12/31/11 28,300 4,038 24,262 26,212 12/31/12 28,300 2,088 26,212* 0 *Amount needed to pay off lease obligation. 2. 2008 Jan. 1 Leased Truck 113,000 Lease Liability 113,000 To record acquisition by lease.
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Unformatted text preview: 3. 2009 Dec. 31 Lease Liability 20,801 Interest Expense 7,499 Cash 28,300 To record payment of lease liability and interest. Dec. 31 Depreciation Expense—Leased Truck 22,600 Accumulated Depreciation—Leased Truck 22,600 To record depreciation of leased asset. $113,000/5 years = $22,600. 4. Long-term assets: Leased truck $ 113,000 Less: Accumulated depreciation 45,200 * $ 67,800 *$22,600 X 2 years = $45,200. Current liabilities: Lease liability $ 22,465 Long-term liabilities: Lease liability $ 50,474...
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