Question
Bridgeport Equipment Leasing Company leased equipment to Sunland Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease
Bridgeport Equipment Leasing Company leased equipment to Sunland Healthcare System on January 1, 2025, for a four-year period. Equal annual payments under the lease are $590000 and are due on January 1 of each year. The first payment was made on January 1, 2025. The implicit rate of interest contemplated by Bridgeport Equipment Leasing and known to Sunland Healthcare is 8%. Sunland's incremental borrowing rate is 11%. The cost of the equipment on Bridgeport Equipment Leasing accounting records was $660000. Assuming that the lease is appropriately recorded as an operating lease and the remaining useful life of the equipment is 6 years, what is the journal entry to record depreciation on December 31, 2025? PV Annuity Due PV Ordinary Annuity PV Single Sum 8%, 4 periods 3.57710 3.31213 0.73503 11%, 4 periods 3.44371 3.10245 0.65873 debit Amortization Expense and Credit Accumulated Depreciation $455909 on Sunland Healthcare System's books. debit Depreciation Expense and Credit Accumulated Depreciation $110000 on Sunland Healthcare System's books. O debit Depreciation Expense and Credit Accumulated Depreciation of $110000 on Bridgeport Equipment Leasing Company's books. debit Depreciation Expense and Credit Accumulated Depreciation $455909 on Bridgeport Equipment Leasing Company's books.
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