ACCT 320 Hinson 4-3 Leases

ACCT 320 Hinson 4-3 Leases - Prepaid rent (annual rent...

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ACCT 320 Assignment 4-3 Leases Jamie Hinson October 7, 2008 P15-3 1. The lease would be classified as an operating lease, not a capital lease. This simply means that the lessor and lessee understand that the asset us only used for temporary use. 2. At the End of Each Year Mid-South Urologists Group, Inc. (Lessee) Rent expense $130,516 Prepaid rent $130,516 Physician’s Leasing (Lessor) Unearned rent revenue $130,516 Rent revenue $130,000 Depreciation expense $114,854 Accumulated depreciation $114,854 3. At the Inception of the Lease Mid-South Urologists Group, Inc (Lessee) Prepaid rent (bonus payment) $300,000 Cash $300,000 Rand Medical (Lessor) Cash $300,000 Unearned rent revenue (bonus payment) $300,000
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At Each of the four payment Dates Mid-South Urologists Group, Inc (Lessee)
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Unformatted text preview: Prepaid rent (annual rent payment) $130,516 Cash $130,516 Rand Medical (Lessor) Cash $130,516 Unearned rent revenue (annual rent payment) $130,516 P15-4 1. $2,000,000 X 4 periods = $8,000,000 - $6,074,700 = 1,925,300 / 6,074,700 = 0.3169 = 32% 2. At the Inception of the Lease Lessee Prepaid rent (bonus payment) $2,000,000 Cash $2,000,000 3 & 4. At Each of the four payment Dates Lessee Prepaid rent (annual rent payment) $2,000,000 Cash $2,000,000 VHF Industries (Lessor) Cash $2,000,000 Unearned rent revenue (annual rent payment) $2,000,000 5. At the Inception of the Lease Lessee Prepaid rent (bonus payment) $2,220,000 Cash $2,220,000...
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ACCT 320 Hinson 4-3 Leases - Prepaid rent (annual rent...

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