9 of 10 View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. 1. 2. 0.83/1 The lessee makes a lease payment of $86,400 to the lessor for equipment in an operating lease transaction. Pharoah Company leases equipment from Noble Construction, Inc. The present value of the lease payments is $756,000. The lease qualifies as a capital lease. Prepare the journal entries that the lessee should make to record the above transactions. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for them amounts.) No. Account Titles and Explanation 1. re Rent Expense Retained Earnings Current Portion of Lease Liability Current Portion of Mortgage Note Payable Current Portion of Mortgage Payable 2. Current Portion of Notes Payable Depreciation Expense Car Rental Expense Interest Expense Interest Payable Film Rental Expense eText Uneamed Revenue Common Shares List c Equipment Rental Expense Gain on Bond Redemption Save fo Loss on Bond Redemption Saved w Accumulated Depreciation Debit 86,400 756.000 Credit 86,400 756,000 Attempts: 1 of 3 used Submit Antwer submission can take up to 10 minutes. View Policies Hide Attempt History Attempt # Time Raw Score Used Assistances Final Attempt 1 Fri, Feb 18, 2022, 1:34:26 PM (America/Toronto -05:00) 83% 83% You are viewing Attempt 1/Continue Work -Your answer is partially correct. 1. 2. The lessee makes a lease payment of $86,400 to the lessor for equipment in an operating lease transaction. Pharoah Company leases equipment from Noble Construction, Inc. The present value of the lease payments is $756,000 lease qualifies as a capital lease. Prepare the journal entries that the lessee should make to record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O fo amounts). No. Account Titles and Explanation 1. Rent Expense Cash (To record rent payment.) 2. Leased Asset-Vehicles Lease Liability (To record lease asset and liability.) Debit 86,400 756.000 Credit 86,400 756,000