I NEED HELP ON THE LAST PART PLEASE
On January 1, 2020, Pronghorn Company contracts to lease equipment for 5 years, agreeing to make a payment of $153,002 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $638,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Pronghorn's incremental borrowing rate is 6%, and the implicit rate in the lease is Unresolved%, which is known by Pronghorn. Title to the equipment transfers to Pronghorn at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Click here to view factor tables. (b) V Your answer is correct. Prepare the journal entries that Pronghorn should record on January 1, 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 O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit January 1, 2020 Right-of-Use Asset 638000 Lease Liability 638000 (To record the lease.) Lease Liability 153,002 Cash 153,002 (To record lease payment.)V Your answer is correct. Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2020. (Cmdit 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 0 for the amounts. Round answers to 0 decimal places, e3. 5,275.) Date Account Title: and Explanation Debit Credit 3:? 3123?. Amortization Expense 255200 I l E (To record amortization of the leased asset.) \"m\" : Interest Ex ense 48500 31,2020 p (d) V Your answer is correct. Prepare the journal entry to record the lease payment of January 1. 2021, assuming reversing entries are not made. [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 0 for the amounts. Round present value factor calculations to 5 decimal places, es. 1.25124 and the nal answers to 0 decimal places, es. 5,275.) Date Account Titles and Explanation Debit Credit January . .. l l I l 1. 2021 Lease Liability 153002 E (e) V Your answer lS correct. What amounts will appear on the lessee's December 31, 2020. balance sheet relative to the lease contract? PRONGHORN COMPANY Balance Sheet (Partial) December 3 1, 2020 V Noncurrent Assets Right-ofUse Asset 5 332300 Current Liabilities Lease Liability $ 153002 Noncurrent Liabilities Lease Liability $ 33049.5 (1') How would the value of the lease liability in part b change if Pronghorn also agreed to pay the fixed annual insurance on the equipment of $2,000 at the same time as the rental payments? {Round answers to Odecimalplaces. as. 5,275.) The lease liability 95
