Question
Illini leases another piece of equipment from Cubs Corporation under a four-year lease agreement on 1/1/20x1. The lease specifies annual payments on each 1/1 and
Illini leases another piece of equipment from Cubs Corporation under a four-year lease agreement on 1/1/20x1. The lease specifies annual payments on each 1/1 and the first payment of $10,000 is made on 1/1/20x1. The lease also specifies a 3% annual increase in the lease payments. The equipment has a fair value of $100,000 on 1/1/20x1. The expected useful life of the equipment is 10 years with no residual value. The equipment will be returned to Cubs at the end of the lease term. The implicit rate is 10%.
Here is what I could find and what I need.
1/1/2021 ROU Asset -36,341
1/1/2021 Lease Obligation -10,000
12/31/2021 Rental Expense? can't find the correct answer
12/31/2021 Accrued Interest 2634
12/31/2021 ROU Asset?
1/1/2022 Lease Obligation 7666
1/1/2022 Accrued Interest 2634
12/31/2022 Rental Expense?
12/31/2022 Accrued Interest 1868
12/31/2022 ROU Asset ?
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