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On January 1, 2019 Dart Company sells one of its machines to England Financial Corporation (EFC) at its fair value of $1,014,000 and immediately leases

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On January 1, 2019 Dart Company sells one of its machines to England Financial Corporation (EFC) at its fair value of $1,014,000 and immediately leases the machine back from EFC. The machine had originally cost Dart $1,000,000, and had a book value of $840,000 at the time of the sale. The lease is for 10 years. The equipment reverts back to Dart at the end of the lease term with no expected salvage value. The lease's implicit rate is 10% which is known by Dart (and it approximates Dart's normal borrowing rate). The lease payments of $150,000 begin on January 1, 2019. Dart uses the straight-line depreciation for similar equipment. REQUIRED: Prepare all of Dart's (the lessee) entries related to the sale and leaseback for 2019. (HINT: Five entries are required) The table below may prove useful. Use the table format option in the answer space to add an element of structure to your answer. For example: Account debited $$$$$$ Account credited $$$$$ Present Value Ordinary Annuity of 1 Present Value of 1 Period 5% 9% 10% Period 5% 9% 1096 0.95238 09174 DOPO 0295238 0.91743 0.90909 On January 1, 2019 Dart Company sells one of its machines to England Financial Corporation (EFC) at its fair value of $1,014,000 and immediately leases the machine back from EFC. The machine had originally cost Dart $1,000,000, and had a book value of $840,000 at the time of the sale. The lease is for 10 years. The equipment reverts back to Dart at the end of the lease term with no expected salvage value. The lease's implicit rate is 10% which is known by Dart (and it approximates Dart's normal borrowing rate). The lease payments of $150,000 begin on January 1, 2019. Dart uses the straight-line depreciation for similar equipment. REQUIRED: Prepare all of Dart's (the lessee) entries related to the sale and leaseback for 2019. (HINT: Five entries are required) The table below may prove useful. Use the table format option in the answer space to add an element of structure to your answer. For example: Account debited $$$$$$ Account credited $$$$$ Present Value Ordinary Annuity of 1 Present Value of 1 Period 5% 9% 10% Period 5% 9% 1096 0.95238 09174 DOPO 0295238 0.91743 0.90909

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