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Assume that on December 3 1 , 2 0 2 4 , Kimberly - Clark Corp. signs a 1 0 - year, non - cancelable
Assume that on December KimberlyClark Corp. signs a year, noncancelable lease agreement to lease a storage building from Crane Storage Company. The following information pertains to this lease agreement.
The agreement requires equal rental payments of $ beginning on December
The fair value of the building on December is $
The building has an estimated economic life of years, a guaranteed residual value of $ and an expected residual value of $ KimberlyClark depreciates similar buildings on the straightline method.
The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.
KimberlyClark's incremental borrowing rate is per year. The lessor's implicit rate is not known by KimberlyClark.
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For calculation purposes, use decimal places as displayed in the factor table provided.
a
Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years and KimberlyClark's fiscal yearend is December List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter O for the amounts. Round answers to decimal places eg
Date
Account Titles and Explanation
Debit
Credit
RightofUse Asset
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