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Brief Exercise 21A-10 Assume that IBM leased equipment that was carried at a cost of $193,000 to Ivanhoe Company. The term of the lease is
Brief Exercise 21A-10 Assume that IBM leased equipment that was carried at a cost of $193,000 to Ivanhoe Company. The term of the lease is 6 years December 31, 2016, with equal rental payments of $44,665 beginning December 31, 2016. The fai value of the equipment at commencement of the lease is $223,001. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 8% no bargain purchase option and notran er ti le bility of ease payments or sp baie. Prepare IBM's December 31, 2016, journal entries at commencement of the lease. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Click here to view the factor table. Date Account Titles and Explanation Debit Credit December 31, 2016 (To record the lease) December 31, 2016 (To record receipt of lease payment) Click if you would like to Show Work for this question: Open Show Work Brief Exercise 21A-10 Assume that IBM leased equipment that was carried at a cost of $193,000 to Ivanhoe Company. The term of the lease is 6 years December 31, 2016, with equal rental payments of $44,665 beginning December 31, 2016. The fai value of the equipment at commencement of the lease is $223,001. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 8% no bargain purchase option and notran er ti le bility of ease payments or sp baie. Prepare IBM's December 31, 2016, journal entries at commencement of the lease. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Click here to view the factor table. Date Account Titles and Explanation Debit Credit December 31, 2016 (To record the lease) December 31, 2016 (To record receipt of lease payment) Click if you would like to Show Work for this question: Open Show Work
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