Blossom Corporation, which uses ASPE, leased equipment it had specifically purchased at a cost of $$177,600$ for Waterway, the lessee.

The term of the lease is $12$ years, beginning January $1,2023,$ with equal rental payments of $$25,599$ at the beginning of each year.

Waterway pays all executory costs directly to third parties. The equipment's fair value at the lease's inception is $$177,600.$ The

equipment has a useful life of $13$ years with no residual value. The lease has an implicit interest rate of $12\%,$ no bargain purchase

option, and no transfer of title. Collectibility is reasonably assured, with no additional costs to be incurred by Blossom.

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

Using $(1)$ tables, $(2)$ a financial calculator, or $(3)$ Excel functions, calculate the PV of the lease payments and prepare Blossom's January

$1,2023$ journal entries at the inception of the lease. $($List all debit entries before credit entries. 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 the

amounts. Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$ decimal places, e$.$g$.5,275.)$

Date Account Titles and Explanation

Debit

Credit

Jan. $1$

$($To record inception of lease.$)$

Jan. $1$

$($To record first lease payment.$)$