Current Attempt in Progress Goring Dairy leases its milking equipment from King Finance Company under the following lease terms. 1 2 3. The lease term is 10 years, noncancelable, and requires equal rental payments of $30.300 due at the beginning of each year starting January 1, 2020. The equipment has a fair value at the commencement of the lease January 1, 2020) of $242.741 and a cost of $180,000 on King Finance's books. It also has an estimated economic life of 15 years and an expected residual value of $45.000, though Goring Dairy has guaranteed a residual value of $50,000 to King Finance The lease contains no renewal options, and the equipment reverts to King Finance upon termination of the lease. The equipment is not of a specialized use. Goring Dairy's incremental borrowing rate is 8% per year. The implicit rate is also 8%. Goring Dairy depreciates similar equipment that it owns on a straight-line basis. Collectibility of the payments is probable: 5. 6. Account Titles and Explanation Debit Credit Lessee Right-of-Usd Asset 244591 Lease ability 244591 (To record the lease.) Lease Liability 30.000 Cash 30,300 (To record lease payment.) Lessor: Lease Recevable 212441 30300 Cash 180000 Leased Asset 62741 Gain on Disposal of Equipment (To record the lease.) (To record lease payment.) Lesse: 020 Interest Expense 17143 Lease Liability 17143 (To record interest.) 0 Depreciation 1942 19450 Right-of-Use Asset (To record amortization.) Lessor 16995 020 Lease Receivable 16995 Interest Revenue Current Attempt in Progress Goring Dairy leases its milking equipment from King Finance Company under the following lease terms. 1 2 3. The lease term is 10 years, noncancelable, and requires equal rental payments of $30.300 due at the beginning of each year starting January 1, 2020. The equipment has a fair value at the commencement of the lease January 1, 2020) of $242.741 and a cost of $180,000 on King Finance's books. It also has an estimated economic life of 15 years and an expected residual value of $45.000, though Goring Dairy has guaranteed a residual value of $50,000 to King Finance The lease contains no renewal options, and the equipment reverts to King Finance upon termination of the lease. The equipment is not of a specialized use. Goring Dairy's incremental borrowing rate is 8% per year. The implicit rate is also 8%. Goring Dairy depreciates similar equipment that it owns on a straight-line basis. Collectibility of the payments is probable: 5. 6. Account Titles and Explanation Debit Credit Lessee Right-of-Usd Asset 244591 Lease ability 244591 (To record the lease.) Lease Liability 30.000 Cash 30,300 (To record lease payment.) Lessor: Lease Recevable 212441 30300 Cash 180000 Leased Asset 62741 Gain on Disposal of Equipment (To record the lease.) (To record lease payment.) Lesse: 020 Interest Expense 17143 Lease Liability 17143 (To record interest.) 0 Depreciation 1942 19450 Right-of-Use Asset (To record amortization.) Lessor 16995 020 Lease Receivable 16995 Interest Revenue