Here is the second part to the questionRight$-$of$-$use asset $ The agreement requires equal rental payments of $$66,399$ beginning on December $31,2019.$

The fair value of the building on December $31,2019$ is $$485,586.$

The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

Kimberly$-$Clark's incremental borrowing rate is $8\%$ per year. The lessor's implicit rate is not known by Kimberly$-$Clark.

Click here to view factor tables. $($For calculation purposes, use $5$ decimal places as displayed in the factor table provided.$)$

$($To record the lease$)$

Lease Liability

Cash

$($To record first lease payment$)$

$($To record amortization of the right$-$of$-$use asset$)$

$($To record interest expense$)$

$($To record amortization of the right$-$of$-$use asset$)$ Right$-$of$-$use asset $

eTextbook and Media

List of Accounts

Lease liability $

eTextbook and Media

List of Accounts

Account Titles and Explanation

Debit

Credit

LeaseLlability

Gain on Lease

eTextbook and Media

List of Accounts

eTextbook and Media

List of Accounts

Lease liability $

eTextbook and Media

List of Accounts

Account Titles and Explanation

Debit

Credit

LeaseLlability

Gain on Lease

eTextbook and Media

List of Accounts