Tempo Industries is an 80%-owned subsidiary of Dalie Inc. On January 1, 20X2, Dalie leased an asset to Tempo and the following journal entries were made:
The terms of the lease agreement require Tempo to make five payments of $5,000 each at the beginning of each year. The implicit interest rate used by both Dalie and Tempo is 8%.
Required:
Prepare the eliminations and adjustments required by the intercompany lease on the Figure 5-9 partial worksheet of December 31, 20X2. Key and explain all eliminations and adjustments.

Question

Tempo Industries is an 80%-owned subsidiary of Dalie Inc. On January 1, 20X2, Dalie leased an asset to Tempo and the following journal entries were made:  
The terms of the lease agreement require Tempo to make five payments of $5,000 each at the beginning of each year. The implicit interest rate used by both Dalie and Tempo is 8%.
Required:
Prepare the eliminations and adjustments required by the intercompany lease on the Figure 5-9 partial worksheet of December 31, 20X2. Key and explain all eliminations and adjustments.

Quizplus · Accepted Answer

The Answer of Tempo Industries is an 80%-owned subsidiary of Dalie Inc. On January 1, 20X2, Dalie leased an asset to Tempo and the following journal entries were made:  
The terms of the lease agreement require Tempo to make five payments of $5,000 each at the beginning of each year. The implicit interest rate used by both Dalie and Tempo is 8%.
Required:
Prepare the eliminations and adjustments required by the intercompany lease on the Figure 5-9 partial worksheet of December 31, 20X2. Key and explain all eliminations and adjustments.

Tempo Industries Is an 80%-Owned Subsidiary of Dalie Inc