a lease was signed on january 1, 2021 for four years. annual rentals payable at end of each year were agreed at rs. 13,000. in addition to annual rentals lessee pays rs. 500 annually for insurance. useful life of equipment was 4 years and interest rate implicit in the lease was 20%. fair value of equipment was rs. 36,000. residual value guaranteed by the lessee was rs. 1,500.
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Prepare journal entries to record these transactions:
(a) Benton Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received.
(b) Assume the same information as in part (a), except that accumulated depreciation for the equipment is $37,200 instead of $41,000.
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