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To raise operating funds, Signal Aviation sold an...

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To raise operating funds, Signal Aviation sold an airplane on January 1, 2011, to a finance company for $850,000. Signal immediately leased the plane back for a 13-year period, at which time ownership of the airplane will transfer to Signal. The airplane has a fair value of $883,116. Its cost and its book value were $684,412. Its useful life is estimated to be 15 years. The lease requires Signal to make payments of $108,783 to the finance company each January 1. Signal depreciates assets on a straight-line basis. The lease has an implicit rate of 10%. Required: (1) Prepare the appropriate entries for Signal on January 1, 2011, to record the sale-leaseback. (Omit the "$" sign in your response.) Date General Journal Debit Credit Jan. 1, 2011 (2) Prepare the appropriate entries for Signal on December 31, 2011, to record necessary adjustments. (Round your answers to the nearest whole dollar amount. Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31, 2011 Record interest Record depreciation Recognize deferred gain rev: 03-03-2011 ask your instructor a questioncheck my workeBook Links (2)references,On the last parts of this, can you please give me an example as to how it is worked? I don't understand the depreciation and the gain. Thank you

 

Paper#12822 | Written in 18-Jul-2015

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