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Grouper Corporation enters into a 6 year lease of equipment on December 31, 2019, which requires 6 annual payments of $37,900 each, beginning December 31,
Grouper Corporation enters into a 6 year lease of equipment on December 31, 2019, which requires 6 annual payments of $37,900 each, beginning December 31, 2019. In addition, Grouper guarantees the lessor a residual value of $18,800 at the end of the lease. However, Grouper believes it is probable that the expected residual value at the end of the lease ter will be $9,400. The equipment has a useful life of 6 years. Prepare Groupers December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Grouper. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to decimal places eg. 5,275) Click here to view factor tables Date Account Titles and Explanation Debit Credit December 31, 2019 (To record the lease lobility) December 31, 2019 (To record lease payment)
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