Bramble Corporation leased equipment to Marin, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,103 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $7,300, a book value of $5,300, and Bramble expects a residual value of $4,800 at the end of the lease term. Bramble set the lease payments with the intent of earning a 5% return, though Marin is unaware of the rate implicit in the lease and has an incremental borrowing rate of 7%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Your answer is correct. What is the amount of the rental payments used in the lease agreement? (Round answer to O decimal places, e.g. 5,275.) 2$ Rental payments 1,103 Your answer is partially correct. Prepare the entries for Bramble for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit Credit Date 1/1/20 Lease Receivable 7,300 Sales Revenue 7,300 12/31/20 Cash 1,103 Lease Receivable 1,103 (To record the recognition of the revenue) Depreciation Expense 12/31/20 757 Accumulated Depreciation-Equipment 757 (To record depreciation expense on the leased equipment) Bramble Corporation leased equipment to Marin, Inc. on January 1, 2020. The lease agreement called for annual rental payments of $1,103 at the beginning of each year of the 3-year lease. The equipment has an economic useful life of 7 years, a fair value of $7,300, a book value of $5,300, and Bramble expects a residual value of $4,800 at the end of the lease term. Bramble set the lease payments with the intent of earning a 5% return, though Marin is unaware of the rate implicit in the lease and has an incremental borrowing rate of 7%. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Your answer is correct. What is the amount of the rental payments used in the lease agreement? (Round answer to O decimal places, e.g. 5,275.) 2$ Rental payments 1,103 Your answer is partially correct. Prepare the entries for Bramble for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit Credit Date 1/1/20 Lease Receivable 7,300 Sales Revenue 7,300 12/31/20 Cash 1,103 Lease Receivable 1,103 (To record the recognition of the revenue) Depreciation Expense 12/31/20 757 Accumulated Depreciation-Equipment 757 (To record depreciation expense on the leased equipment)
