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On January 1, 2020, Monty Inc. sold computer equipment to Teal Mountain Co. The sales price of the equipment was $519,000 and its carrying amount is $395,000. Record any journal entries necessary for Monty from the sale of the computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1 1/1/20 Cash 519000 Gain on Disposal of Equ 124000 Equipment 395000 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 used (b) Your answer is partially correct. Try again. Use the information from part a. Assume that, on the same day the sale occurred, Monty enters into an agreement to lease the equipment from Teal Mountain for 10 years with annual lease payments of $67,212.92 at the end of each year, beginning on December 31, 2020. If Monty has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Monty from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 - Leased Asset 519000 Lease Liability 519000 12/31/20 12/31 20 Lease Liability Lease Liability 41262.92 Interest Expense 25950 7 Cash cash 67212.92 (C) Your answer is partially correct. Try again. Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $67,212.92 at the beginning of each year. Record any journal entries necessary for Monty from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit T1/1/20 Cash 519000 T Equipment 395000 124000 Gain on Disposal of Equ (To record sale of equipment) (To record the lease) 1/1/20 Notes Payable Cash (To record lease payment) On January 1, 2020, Monty Inc. sold computer equipment to Teal Mountain Co. The sales price of the equipment was $519,000 and its carrying amount is $395,000. Record any journal entries necessary for Monty from the sale of the computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 1 1/1/20 Cash 519000 Gain on Disposal of Equ 124000 Equipment 395000 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 used (b) Your answer is partially correct. Try again. Use the information from part a. Assume that, on the same day the sale occurred, Monty enters into an agreement to lease the equipment from Teal Mountain for 10 years with annual lease payments of $67,212.92 at the end of each year, beginning on December 31, 2020. If Monty has an incremental borrowing rate of 5% and the equipment has an economic useful life of 10 years, record any journal entries necessary for Monty from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 - Leased Asset 519000 Lease Liability 519000 12/31/20 12/31 20 Lease Liability Lease Liability 41262.92 Interest Expense 25950 7 Cash cash 67212.92 (C) Your answer is partially correct. Try again. Use the information from part b. Now, instead of 10 years, the lease term is only 3 years with annual lease payments of $67,212.92 at the beginning of each year. Record any journal entries necessary for Monty from the sale and leaseback of computer equipment in 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit T1/1/20 Cash 519000 T Equipment 395000 124000 Gain on Disposal of Equ (To record sale of equipment) (To record the lease) 1/1/20 Notes Payable Cash (To record lease payment)