Question
a/ Prepare the journal entries that Cage should record on January 1, 2020. b/ Prepare the journal entries to record amortization of the leased asset
a/ Prepare the journal entries that Cage should record on January 1, 2020.
b/ Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2020.
c/ Prepare the journal entry to record the lease payment of January 1, 2021, assuming reversing entries are not made
d/ What amounts will appear on the lessees December 31, 2020, balance sheet relative to the lease contract?
e/ How would the value of the lease liability in part b change if Cage also agreed to pay the fixed annual insurance on the equipment of $2,000 at the same time as the rental payments?
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