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Exercise 21-21 a-d Grouper Incorporated leases a piece of equipment to Skysong Corporation on January 1, 2020. The lease agreement called for annual rental payments of $5,037 at the beginning of each year of the 4-year lease. The equipment has an economic useful life of 6 years, a fair value of $25,500, a book value of $20,500, and both parties expect a residual value of $8,200 at the end of the lease term, though this amount is not guaranteed. Grouper set the lease payments with the intent of earning a 5% return, and Skysong is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a specialized nature. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Your answer is correct. Determine the nature of the lease to both Grouper and Skysong. The lease is a/an operating v lease to Grouper. The lease is a/an operating v lease to Skysong. SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Prepare the lease amortization schedule(s) for Skysong for all 4 years of the lease. (Round answers to 0 decimal places, e.g. 5,275.) SKYSONG CORPORATION Lease Amortization Schedule Annuity-Due Basis Date Reduction ofYour answer is partially correct. Try again. Prepare the lease amortization schedule(s) for Skysong for all 4 years of the lease. (Round answers to 0 decimal places, e.g. 5,275.) SKYSONG CORPORATION Lease Amortization Schedule Annuity-Due Basis Annual Payment Interest on Liability Reduction of Date Lease Liability Lease Liability 1/1/20 18754 1/1/20 5037 5037 13717 1/1/21 5037 686 4351 9366 1/1/22 5037 468 4569 4797 1/1/23 5037 240 4797 Lease Expense Schedule Lease Expense Date (Straight-Line) Interest on Lease Liability Amortization of Carrying Value of ROU Asset ROU Asset 1/1/20 18754 12/31/20 5037 686 4351 13717 12/31/21 5037 468 4569 9366 12/31/22 -K 5037 240 4797 4569 12/31/23 5037 468 4569CALCULATOR PRINTER VERSION BAC Your answer is partially correct. Try again. Prepare the journal entries for Skysong for 2020 and 2021. (Credit account titles are automatically indented when the amount is entered, Do not indent manually. Record journ entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 Cash 18754 Lease Liability 18754 (To record the lease) 1/1/20 Lease Liability 5037 Cash 5037 (To record lease payment) 12/31/20 v V Lease Expense 5037 Lease Liability 686 Right-of-Use Asset 4351 1/1/21 v Lease Liability 5037 Cash 5037 12/31/21 v Lease Expense 5037 Lease Liability 468 Right-of-Use Asset 4569Your answer is partially correct. Try again. Suppose Skysong incurs initial direct costs of $800 related to the lease. Prepare the journal entries for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit v 1/1/20 X Leased Asset 19554 Lease Liability 18754 Cash 800 (To record the lease) 1/1/20 Lease Liability 5037 cash 5037 (To record lease payment) V 12/31/20 v Lease Expense 5237 Lease Liability 685 Right-of-Use Asset 4551 Click if you would like to Show Work for this question: Open Show Work
