culver corporation leases equipment from Falls company on January 1, 2025. The lease agreement does not transfer ownership contain a bargain purchase option. It is not a specialized asset. it covers three years of the equipment, eight years of useful life in the present value of the lease payments is less than 90% of the fair value of the asset leased.

prepare culvers journal entries on January 1, 2025 in December 31, 2025. Assume the annual lease payment is $33,000 at the beginning of each year and culvers incremental borrowing rate is 6% what is the same as the leasers implicit rate?

Culver Corporation leases equipment from Falis Company on January 1, 2025. The lease agreement does not transfer ownership. contain a bargain purchase option, and is not a specialized asset. It covers 3 years of the equipment's 8 -year useful life, and the present value of the lease payments is less than 90% of the fair value of the asset leased. Prepare Culver's journal entries on January 1, 2025, and December 31, 2025. Assume the annual lease payment is $33.000 at the beginning of each year, and Culver's incremental borrowing rate is 6%, which is the same as the lessor's implicit rate, (Ust all debit entries before credit entries, Credit account titles are outomatically indented when the amount is entered. Do not indent manualiy. For colculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, es: 5,265. If no entry is required, select "No Entry' for the account titles and enter Ofor the amounts. Record joumal entries in the order persented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/25 (To record lease liability) (To record lease payment)