Please fix all my mistakes in red!! Thank you!
Crane Incorporated leases a piece of machinery to Blue Company on January 1, 2020, under the following terms. 3 1. The lease is to be for 4 years with rental payments of $10,814 to be made at the beginning of each year. 2. The machinery' has a fair value of $57,782, a book value of $43,120, and an economic life of 10 years. At the end of the lease term, both parties expect the machinery to have a residual value of $21,560. To protect against a large loss, Crane requests Blue to guarantee $14,920 of the residual value, which Irving agrees to do 4. The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. 5. The implicit rate is 5%, which is known by Blue. 6. Collectibility of the payments is probable. Prepare the journal entries for Blue for the year 2020. (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 to O decimal places eg. 5,275.) Debit Credit Date Account Titles and Explanation Right-of-Use Asset Jan. 1 40263 Lease Liability 40263 (To record lease) Jan. 1 lease libaility 10814 cash 10814 (To records first lease payment) Dec. 31 Interest Expense 1472 Interest Payable 1472 (To record accrued interest) Dec. 31 Amortization Expense 10066 Right-of-Use Asset 10066 (To record amortization expense) Prepare the journal entries for Crane for the year 2020. (Credit account titles are automatically indented when the amount 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 to O decimal places eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 (To record lease) Jan. 1 (To record first lease payment) Dec. 31 (To record lease revenue) Suppose Blue did not guarantee any amount of the expected residual value. Prepare the journal entries for Crane for the year 2020. (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 to O decimal places eg. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash 10814 Unearned Lease Revenue 10814 (To record lease payments) Dec. 31 Unearned Lease Revenue 10814 Lease Revenue 10814 (To record lease revenue) Dec. 31 Depreciation Expense 4312 4312 Accumulated Depreciation Accumulated Depreciation-Buildings Accumulated Depreciation-Capital Leases e Textt Accumulated Depreciation-Equipment Accumulated Depreciation-Leased Buildings List of Accumulated Depreciation-Leased Equipment Accumulated Depreciation-Leased Machinery Accumulated Depreciation Machinery Accumulated Depreciation-Right-of-Use Asset
