Chambers leased equipment to Montga Company on November 1,2016.The terms of the lease are as follows:
Montga uses straight-line depreciation for its property,plant,and equipment.
Required:
a.Prepare the journal entries for the lease from November 1 through December 31,2016.
b.You and the director of finance for Montga Company.You are concerned about the impact the lease will have on your key performance indicator,the total debt to total assets ratio.Discuss the impact the lease will have on this performance indicator.

Question

Chambers leased equipment to Montga Company on November 1,2016.The terms of the lease are as follows:
  Montga uses straight-line depreciation for its property,plant,and equipment.
Required:
a.Prepare the journal entries for the lease from November 1 through December 31,2016.
b.You and the director of finance for Montga Company.You are concerned about the impact the lease will have on your key performance indicator,the total debt to total assets ratio.Discuss the impact the lease will have on this performance indicator.

Quizplus · Accepted Answer

The Answer of Chambers leased equipment to Montga Company on November 1,2016.The terms of the lease are as follows:
  Montga uses straight-line depreciation for its property,plant,and equipment.
Required:
a.Prepare the journal entries for the lease from November 1 through December 31,2016.
b.You and the director of finance for Montga Company.You are concerned about the impact the lease will have on your key performance indicator,the total debt to total assets ratio.Discuss the impact the lease will have on this performance indicator.

Chambers Leased Equipment to Montga Company on November 1,2016