On January 1,2011,Sheldon Company Sold a Building to Breezy Board

question 19

Essay

On January 1,2011,Sheldon Company sold a building to Breezy Board Bank for $52,000,000 and immediately leased it back under a 15-year non-cancellable lease at $5,918,000 per year,payable at the beginning of each year.Breezy Board used an implicit rate of 9% to determine the lease payments,and this rate is known to Sheldon.The building had a carrying value of $34,000,000 on Sheldon's books.
Requirement:
Assume that the lease is an finance lease for both the lessee and lessor for both the lessee and lessor,and there is no profit margin for the lessor.Prepare all necessary journal entries for 2011 for Sheldon (the seller-lessee)and Breezy Board (the buyer-lessor).Breezy Board will depreciate the building on a straight-line basis over the remaining useful life of 15 years.Explain the implications to Soldier's depreciation expense of this transaction.

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Definitions:

More Than Two Groups

This refers to experimental conditions or treatments in a study where there are three or more categories or levels being compared.

Scheffé Test

A statistical procedure used for making post-hoc comparisons among group means in an analysis of variance setting.

Familywise Error

The probability of making one or more type I errors across a family of hypothesis tests.

Statistical Procedure

A method or set of methods used in analyzing data to achieve a specific outcome or make certain inferences.