partially correct but need help and explantion for the red parts
On January 1, 2020, Larkspur Co. leased a building to Crane Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $3,900,000 (unguaranteed). 2. The leased building has a cost of $4,400,000 and was purchased for cash on January 1, 2020. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $260,000 per year and are made at the beginning of the year. 5. Crane has an incremental borrowing rate of 5%, and the rate implicit in the lease is unknown to Crane. 6. Both the lessor and the lessee are on a calendar-year basis. Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Your answer is correct. Prepare the journal entries that Larkspur should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent mar in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 Buildings 4400000 V v Cash 4400000 (To record cost of the building) v 1/1/20 Cash 260000 Unearned Lease Reven 260000 (To record receipt of lease payment) 12/31/20 v Unearned Lease Revenue 260000 V Lease RevenueYour answer is correct. Prepare the journal entries that Larkspur should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manu in the order presented in the problem.) Date Account Titles and Explanation Debit Credit V 1/1/20 Buildings 4400000 V Cash 4400000 (To record cost of the building) V 1/1/20 Cash 260000 Unearned Lease Revent 260000 (To record receipt of lease payment) V 12/31/20 v Unearned Lease Revenue 260000 V Lease Revenue 260000 (To record the recognition of the revenue each period) V 12/31/20 v Depreciation Expense 88000 Accumulated Depreciati 88000 (To record depreciation expense on the leased asset)CALCULATOR PRINTER VERSION Cash 260000 (To record lease payment) 12/31/20 Lease Expense 260000 Lease Liability 87382.55 Right-of-Use Asset 172617.45 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is correct. If Crane paid $30,000 to a real estate broker on January 1, 2020, as a fee for finding the lessor, what is the initial measurement of the right-of-use asset? Right-of-use asset 2138033 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTSYour answer is partially correct. Try again. Prepare the journal entries that Crane should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit V 1/1/20 Right-of-Use Asset 2108033 Lease Liability 2108033 (To record the lease) 1/1/20 Lease Liability 260000 V Cash 260000 (To record lease payment) 12/31/20 v Lease Expense 260000 V Lease Liability 87382.55 V Right-of-Use Asset 172617.45
