Unformatted text preview: 5. Horton's incremental borrowing rate is 7% per year. The lessee is aware that the lessor used an implicit rate of 6% in computing the lease payments. Chapter 6 has the pv tables if needed. Instructions (a) Indicate the type of lease Horton Company has entered into and what accounting treatment is applicable. (b) Prepare the journal entries on Horton's books that relate to the lease agreement for the following dates: (Round all amounts to the nearest dollar. Include a partial amortization schedule.) 1. July 1, 2010. 2. December 31, 2010. 3. July 1, 2011. 4. December 31, 2011....
View Full Document
- Spring '08
- Accounting, Generally Accepted Accounting Principles, 6%, Horton, $120,000, $789,886