Exercise 21-3 Assume that on January 1, 2012, Kimberly-Clark Corp. signs a 10-year noncancelable lease agreement to lease a storage building from Sheffield Storage Company. The following information pertains to this lease agreement 1. The agreement requires equal rental payments of $77,400 beginning on 2. The fair value of the building on January 1, 2017 is $453,000. 3. The building has an estimated e economic life of 12 years, with an unguaranteed residual value of es simlar buildings on the straight-line method the termination of the lease, the building reverts to the $10,200. Kimberly-Clark depreciate 4. The lease is nonrenewable. At lessor Kimberly-Clark's incremental borrowing rate is 12% per year. The lessor's implicit rate is not known 5. by Kimberly-Clark 6. The yearly rental payment includes $5,816 of executory costs related to taxes on the property Prepare the journal entries on the lessee's books to reflect the signing of the lease record the payments and expenses related to th minimum lease payments.) (Credit account titles are a titles and enter O for amounts is lease for the years 2017 and 2018. Kimberly-Clark's year-end is December 31. (Hint: Do the table for ten periods based on present value of utomatically indented when amount is t manually. If no entry is required, select "No Entry for the account the amounts. Round present value factor calculations to 5 decimal places, e.g 1.25124 and the final answer to O decimal places e-g. 58,971.) Date Account Titles and Explanation (To record the lease.) (To record first payment.) To record deprecation.) (To record interest.) (To record second payament.) (To record depreciation.) To record inberest.) Exercise 21-3 Assume that on January 1, 2012, Kimberly-Clark Corp. signs a 10-year noncancelable lease agreement to lease a storage building from Sheffield Storage Company. The following information pertains to this lease agreement 1. The agreement requires equal rental payments of $77,400 beginning on 2. The fair value of the building on January 1, 2017 is $453,000. 3. The building has an estimated e economic life of 12 years, with an unguaranteed residual value of es simlar buildings on the straight-line method the termination of the lease, the building reverts to the $10,200. Kimberly-Clark depreciate 4. The lease is nonrenewable. At lessor Kimberly-Clark's incremental borrowing rate is 12% per year. The lessor's implicit rate is not known 5. by Kimberly-Clark 6. The yearly rental payment includes $5,816 of executory costs related to taxes on the property Prepare the journal entries on the lessee's books to reflect the signing of the lease record the payments and expenses related to th minimum lease payments.) (Credit account titles are a titles and enter O for amounts is lease for the years 2017 and 2018. Kimberly-Clark's year-end is December 31. (Hint: Do the table for ten periods based on present value of utomatically indented when amount is t manually. If no entry is required, select "No Entry for the account the amounts. Round present value factor calculations to 5 decimal places, e.g 1.25124 and the final answer to O decimal places e-g. 58,971.) Date Account Titles and Explanation (To record the lease.) (To record first payment.) To record deprecation.) (To record interest.) (To record second payament.) (To record depreciation.) To record inberest.)
