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In 2019, Flounder Trucking Company negotiated and closed a long-term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected

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In 2019, Flounder Trucking Company negotiated and closed a long-term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to the company's specifications on land owned by the company. On January 1. 2020, Flounder Trucking took possession of the lease properties. Although the terminals have a composite useful life of 40 years, the non-cancelable lease runs for 20 years from January 1,2020 , with a bargain purchase option available upon expiration of the lease. The 20-year lease is effective for the period January 1, 2020, through December 31,2039 . Rental payments of $840,000 are payable to the lessor on January 1 of each of the first 10 years of the lease term. Advance rental payments of $336,000 are due on January 1 for each of the last 10 years of the lease. The company has an option to purchase all of these leased facilities for $1 on December 31 , 2039. The lease was negotiated to assure the lessor a 6% rate of return. Selected present value factors are as follows. For an Ordinary Prepare a schedule to compute for Flounder Trucking the present value of the terminal facilities and related obligation at January 1, 2020. (Round answers to 0 decimal places, eg. 125.) Discounted present value of terminal facilities and related obligation eTextbook and Media List of Accounts Attempts: 2 of 3 us (b) Assuming that the present value of terminal facilities and related obligation at January 1, 2020, was $8,017,181, prepare journat entries for Flounder Trucking to record the following: (Credit occount titles are automatically indented when amount is entered. Do noi indent manually. If no entry is required, select "No Entry" for the occount titles and enter of for the amounts. Round answers to O decimal places, es. 125.) (1) Cash payment to the lessor on January 1,2022. (2) Amortization of the cost of the leased properties for 2022, using the straight-line method and assuming a zero saivage value. (3) Accrual of interest expense at December 31, 2022. No. Account Titles and Explanation Debit Credit 1. 2. (To record annual amortization expense on leased assets.) 3. (To record interest acerual on outstanding debt.)

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