$1.$

Question $1$

Illini leases another piece of equipment from Cubs Corporation under a four$-$year lease agreement on $1/1/20$x$1.$ The lease specifies annual payments on each $1/1$ and the first payment of $$10,000$ is made on $1/1/20$x$1.$ The lease also specifies a $3\%$ annual increase in the lease payments. The equipment has a fair value of $$100,000$ on $1/1/20$x$1.$ The expected useful life of the equipment is $10$ years with no residual value. The equipment will be returned to Cubs at the end of the lease term. The implicit rate is $10\%.$

Please refer to the instructions and the table in this question. Enter the correct journal entry for part $[$A$].$

Project $2\mathrm{.}2$ Part $2$ Journal Entries

Date

Account Name $($Debit$)$

Account Name $($Credit$)$

Debit

Credit

$1/1/20$X$1$

ROU assets

$[$A$]$

Lease obligation

$[$B$]$

$1/1/20$X$1$

Lease obligation

$[$C$]$

Cash

$[$D$]$

$12/31/20$X$1$

Rental expense

$[$E$]$

Accrued interest

$[$F$]$

ROU assets

$[$G$]$

$1/1/20$X$2$

Lease obligation

$[$H$]$

Accrued interest

$[$I$]$

Cash

$[$J$]$

$12/31/20$X$2$

Rental expense

$[$K$]$

Accrued interest

$[$L$]$

ROU assets

$[$M$]$

I need help with A$,$B$,$E$,$G$,$K$,$L$.$

Thanks.