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Kingbird Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 5 years and requires equal rental payments of $78,002

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Kingbird Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 5 years and requires equal rental payments of $78,002 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $320,000, an estimated useful life of 5 years, and no estimated residual value. The appropriate interest rate is 119. Click here to view factor tables Prepare Kingbird's 2019 and 2020 journal entries, assuming Kingbed depreciates similar equipment it owns on a straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manual For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to decimal places, e.g. 5.275.) Date Account Titles and Explanation Debit Credit 12/31/19 To record leave liability 12/31/19 (To record lease payment) 12/31/20 Interest Expense Lease Liability Cash (Torcord interest expense) 12/31/20 Amortization Expense Right-of-Use Asset to record amortization of the right-of-use asset)

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