Problem 15-12 (Algo) Lessee and lessor; lessee guaranteed residual value [LO15-2, 15-6] On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. The equipment cost Ghosh $959,600 and has an expected useful life of five years. • Ghosh expects the residual value at December 31, 2027, will be $303,600. Negotiations led to the lessee guaranteeing a $343,600 residual value. Equal payments under the finance/sales-type lease are $203,600 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease. J4
Problem 15-12 (Algo) Lessee and lessor; lessee guaranteed residual value [LO15-2, 15-6] On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Ghosh. The equipment cost Ghosh $959,600 and has an expected useful life of five years. • Ghosh expects the residual value at December 31, 2027, will be $303,600. Negotiations led to the lessee guaranteeing a $343,600 residual value. Equal payments under the finance/sales-type lease are $203,600 and are due on December 31 of each year with the first payment being made on December 31, 2024. • Karrier is aware that Ghosh used a 5% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease. 2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease. J4
Cornerstones of Financial Accounting
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Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
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![Problem 15-12 (Algo) Lessee and lessor; lessee guaranteed residual value [LO15-2, 15-6]
On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending
December 31, 2027, at which time possession of the leased asset will revert back to Ghosh.
The equipment cost Ghosh $959,600 and has an expected useful life of five years.
• Ghosh expects the residual value at December 31, 2027, will be $303,600.
Negotiations led to the lessee guaranteeing a $343,600 residual value.
Equal payments under the finance/sales-type lease are $203,600 and are due on December 31 of each year with the first
payment being made on December 31, 2024.
• Karrier is aware that Ghosh used a 5% interest rate when calculating lease payments.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease.
2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease.
J4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbbc8288b-6360-4b8a-96f7-39885907a8d1%2F0effeeaa-b70e-4e14-9a68-84a07f1608c3%2Flkmehlu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 15-12 (Algo) Lessee and lessor; lessee guaranteed residual value [LO15-2, 15-6]
On January 1, 2024, Ghosh Industries leased a high-performance conveyer to Karrier Company for a four-year period ending
December 31, 2027, at which time possession of the leased asset will revert back to Ghosh.
The equipment cost Ghosh $959,600 and has an expected useful life of five years.
• Ghosh expects the residual value at December 31, 2027, will be $303,600.
Negotiations led to the lessee guaranteeing a $343,600 residual value.
Equal payments under the finance/sales-type lease are $203,600 and are due on December 31 of each year with the first
payment being made on December 31, 2024.
• Karrier is aware that Ghosh used a 5% interest rate when calculating lease payments.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare the appropriate entries for both Karrier and Ghosh on January 1, 2024, to record the lease.
2. Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare all appropriate entries for both Karrier and Ghosh on December 31, 2024, related to the lease.
J4
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