Only part E!!

Pina Corporation entered into a lease agreement on January 1, 2020, to provide Blossom Company with a piece of machinery. The terms of the lease agreement were as follows. 1. The lease is to be for 3 years with rental payments of $14,941 to be made at the beginning of each year. 2. The machinery has a fair value of $60,000, a book value of $40,000, and an economic life of 8 years. 3. At the end of the lease term, both parties expect the machinery to have a residual value of $30,000, none of which is guaranteed. 4. The lease does not transfer ownership at the end of the lease term, does not have a bargain purchase option, and the asset is not of a specialized nature. 5. The implicit rate is 4%, which is known by Blossom. 6. Collectibility of the payments is probable. Your Answer Correct Answer (Used) Prepare the amortization schedules Blossom will use over the lease term. BLOSSOM COMPANY Lease Amortization Schedule Annuity-Due Basis Annual Payment Interest on Liability Reduction of Lease Liability Lease Liability $ 43,121 $ 14,941 $ 0 $ 14,941 28,180 14,941 1,127 13,814 14,366 14,941 575 14,366 0 Lease Expense Schedule (A) traight-Line Expense (B) Interest on Lease Liability (C) Amortization of Right-of-Use Asset (and Liability) (A-B) Carrying Value of Right-of-Use Asset $ 43,121 14,941 $ 1,127 $ 13,814 29,307 14,941 575 14,366 14,941 14,941 0 14,941 0 (c) Your answer is correct Prepare the 2020 journal entries for Blossom. (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 for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to decimal places eg. 58,971.) Date Account Titles and Explanation Debit Credit Jan. 1 Right-of-Use Asset 43121 Lease Liability 43121 (To record lease) Jan. 1 Lease Liability 14941 Cash 14941 (To record first lease payment) Dec. 31 Lease Expense 14941 Lease Liability 1127 Right-of-Use Asset 13814 (To record lease expense and amortization) (d) Your Answer Correct Answer (Used) Prepare the 2020 journal entries for Pina. (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 for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash 14,941 Unearned Lease Revenue 14,941 (To record lease payments) Dec. 31 Unearned Lease Revenue 14.941 Lease Revenue 14,941 (To record lease revenue) Dec. 31 Depreciation Expense 5.000 Accumulated Depreciation-Leased Machinery 5.000 (To record depreciation) (e) Suppose the lease were only for one year instead of 3 years, with just one lease payment at the beginning of the lease term. Prepare any journal entries Blossom would need, assuming it elects to use the short-term lease option. (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 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer too decimal places eg. 58,971.) Date Account Titles and Explanation Debit Credit Jan. 1