Current Attempt in Progress Whispering Steel Company, as lessee, signed a lease agreement for equipment for 5 years, beginning December 31, 2020. Annual rental payments of $45,000 are to be made at the beginning of each lease year (December 31). The interest rate used by the lessor in setting the payment schedule is 7%: Whispering's incremental borrowing rate is 9%. Whispering is unaware of the rate being used by the lessor. At the end of the lease, Whispering has the option to buy the equipment for $5,000, considerably below its estimated fair value at that time. The equipment has an estimated useful life of 7 years, with no salvage value. Whispering uses the straight- line method of depreciation on similar owned equipment. Click here to view factor tables, Your answer is partially correct: Prepare the journal entries, that Whispering should record on December 31, 2020. (Credit account titles are automatically indented when 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 answers to O decimal places, eg, 58,971.) Debit Credit Date December 31, 2020 Account Titles and Explanation Right-of-Use Asset 190755 190755 Lease Liability (To record leased asset and related liability.) Lease Liability 45000 Cash 45000 (To record the first rental payment.) e Textbook and Media List of Accounts Your answer is partially correct Prepare the journal entries, that Whispering should record on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit December Amortization Expense 31, 2021 Right-of-Use Asset (To record amortization.) Interest Expense 27250 27250 13117 31883 Lease Liability 45000 Cash (To record annual payment on lease liability.) e Textbook and Media List of Accounts Your answer is partially correct. Prepare the journal entries, that Whispering should record on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter Ofor the amounts. Round answers to O decimal places eg. 58,971.) Debit Credit Date December 31.2022 Account Titles and Explanation Amortization Expense 27250 27250 Right-of-Use Asset (To record annual amortization on leased assets.) Interest Expense 10248 Lease Liability 34752 45000 Cash (To record annual payment on lease liability) e Textbook and Media List of Accounts Your answer is partially correct. What amounts would appear on Whispering's December 31, 2022, balance sheet relative to the lease arrangement? (Round answers to decimal places, eg. 58,971) WHISPERING STEEL COMPANY Balance Sheet December 31, 2022 Assets Non-current Assets 190755 Right-of-Use Asset Liabilities Current Liabilities $ 37880 Lease Liability Long-term Liabilities $ 41241 Lease Liability e Textbook and Media List of Accounts
