On January 1, 2017, Blue Company contracts to lease equipment for 5 years, agreeing to make a payment of $153,482 at the beginning of each year, starting January 1, 2017. The leased equipment is to be capitalized at $640,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Blue's incremental borrowing rate is 6%, and the implicit rate in he lease is 10% which s known by Blue. Title o he equipment transfers o Blue at the end of ease. The asset has an estimated use ul f of ears and no residual value. Click here to view factor tables Prepare the journal entries that Blue should record on January 1, 2017. (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.) DateAccount Titles and Explanation Debit Credit January 1, 2017 To record the lease.) (To record lease payment.) Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2017. (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 answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2017 To record amortization of the leased asset.) December 31, 2017 On January 1, 2017, Blue Company contracts to lease equipment for 5 years, agreeing to make a payment of $153,482 at the beginning of each year, starting January 1, 2017. The leased equipment is to be capitalized at $640,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Blue's incremental borrowing rate is 6%, and the implicit rate in he lease is 10% which s known by Blue. Title o he equipment transfers o Blue at the end of ease. The asset has an estimated use ul f of ears and no residual value. Click here to view factor tables Prepare the journal entries that Blue should record on January 1, 2017. (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.) DateAccount Titles and Explanation Debit Credit January 1, 2017 To record the lease.) (To record lease payment.) Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2017. (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 answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2017 To record amortization of the leased asset.) December 31, 2017
