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On January 1, 2025, Cullumber Animation sold a truck to Blossom Finance for $38,000 and immediately leased it back. The truck was carried on
On January 1, 2025, Cullumber Animation sold a truck to Blossom Finance for $38,000 and immediately leased it back. The truck was carried on Cullumber's books at $31,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Cullumber at lease-end. The lease requires three equal rental payments of $8,810 at the end of each year (first payment on January 1, 2026). The appropriate rate of interest is 4%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Cullumber's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 de O decimal places, eg. 5,265.. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date Account Titles and Explanation 1/1/25 Cash 1/1/25 Trucks Gain on Disposal of Plant Assets (To record sale of truck) Right-of-Use Asset 12/31/25 Lease Liability (To record lease liability) Lease Expense Lease Liability Right-of-Use Asset Debit 38000 24449 8810 Credit 31000 7000 24449
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DateAccount Titles and ExplanationDebitCredit 1125Cash38000 Trucks...Get Instant Access to Expert-Tailored Solutions
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