2011 Financial 5 Update - 2011 Financial 5 Update Financial...

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Financial 5 Update for the 2011 Edition Last Updated March 8, 2011 SECTION A: TEXT AND LECTURE ERRATA Item A.1 Pg. F5-18, Example - Lease Liability and Asset Amortization - Lessee's Books The dates of the journal entries in this example are inconsistent with the facts and the amortization table. They should be corrected as follows (changes highlighted): Journal Entries - January 1, Year 1: Journal entry no. 1 is to record the lease on the lessee's books: DR Leased equipment under capital (finance) lease $33,795.00 CR Obligations under capital (finance) lease $33,795.00 Journal entry no. 2 is to record the first payment at lease inception: DR Obligations under capital (finance) lease $5,000.00 CR Cash $5,000.00 Journal Entries - December 31, Year 1: Journal entry no. 1 is to accrue interest expense and liability: DR Interest expense $2,879.50 CR Interest payable $2,879.50 Journal entry no. 2 is to depreciate the asset over the 10-year lease life ($33,795 ÷ 10 years) DR Depreciation expense $3,379.50 CR Accumulated depreciation—leased asset $3,379.50 Journal Entries - January 1, Year 2: Journal entry to record the lease payment: DR Interest payable $2,879.50 DR Obligation under capital (finance) lease 2,120.50 CR Cash $5,000.00 Item A.2 Pg. F5-24, National Lecturer Note next to Item B.1. Selling Price There is a typo in the note written by the National Instructor next to Item B.1. Selling Price. The note should read as follows (correction highlighted): General Rule - Over 90% = Loan
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This note was uploaded on 09/25/2011 for the course ACCOUNTING AC591 taught by Professor W during the Spring '11 term at Keller Graduate School of Management.

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2011 Financial 5 Update - 2011 Financial 5 Update Financial...

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