Smart Corporation is a 90%-owned subsidiary of Phan Inc.On January 2, 2016, Smart agreed to lease $400,000 of construction equipment from Phan for $3,000 a month on an operating lease.The equipment has a 10-year life and is being depreciated using the straight-line method.
Required:
Prepare the eliminations and adjustments required by the intercompany lease on the Figure 5-8 partial worksheet for December 31, 2016.Key and explain all eliminations and adjustments.
Definitions:
Direct Evidence
Evidence that directly proves a fact without needing inference or presumption.
Court
A tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice.
Relevant Evidence
Information presented in court that directly relates to the facts in dispute and can help prove or disprove a point.
Direct Evidence
Evidence that directly proves a fact, without the need for inference or presumption, and which in its own right conclusively establishes the fact in question.
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