Cullumber Incorporated leases a piece of machinery to Bramble Company on January 1, 2020, under the following terms. 1 2. 3. The lease is to be for 4 years with rental payments of $15,686 to be made at the beginning of each year, The machinery' has a fair value of $84.268, a book value of $62,880, and an economic life of 10 years, At the end of the lease term both parties expect the machinery to have a residual value of $31.440. To protect against a large loss, Cullumber requests Bramble to guarantee $22,330 of the residual value, which Bramble agrees to do. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. The implicit rate is 5%, which is known by Bramble. Collectibility of the payments is probable. 4. 5. 5. 6. 6. Click here to view factor tables. Evaluate the criteria for classification of the lease, and describe the nature of the lease. For the lessee, it is a and for the lessor, it is a Prepare the journal entries for Bramble for the yow 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manne entry is required, select "No Entry for the accountities and enter for the amount Round present value factor calculations to decimal places 125124 and the final answer to decimal placeses 5275) Date Account Titles and Explanation Debit Credit Jan 1 (To record lease) Jan. 1 (To records first lease payment) Dec 31 (To record accrued interest) Dec. 31 (To record amortization expense) Prepare the journal entries for Cullumber for the year 2020. (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 for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to decimal places es 5,275) Date Account Titles and Explanation Debit Credit Jan. 1 (To record lease) Jan. 1 (To record first lease payment) Dec. 31 Suppose Bramble did not guarantee any amount of the expected residual value. Prepare the journal entries for Bramble for the year 2020. (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 for the amounts. Round present value foctor calculations to decimal places.es 1.25124 and the final answer to decimal places eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 (To record lease) Jan. 1 (To record first lease payment) Dec. 31 (To record interest and amortization) Suppose Bramble did not guarantee any amount of the expected residual value. Prepare the journal entries for Cultumber for the year 2020. (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 for the amounts. Round present value factor calculations to decimal places, es 1.25 124 and the final answer to decimal places es 5,275) Date Account Titles and Explanation Debit Credit Jan 1 (To record lease payments) Dec. 31 (To record lease revenue) Dec. 31 (To record depreciation)
