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Please help solve this question and please show work. Thank you very much! 2. On January 1, 2017, New Port Company leased equipment from Scanner
Please help solve this question and please show work.
Thank you very much!
2. On January 1, 2017, New Port Company leased equipment from Scanner Company. lease had a non-cancelable four-year term and required annual lease payments of S60,OOO to be paid on January I of each year with the first payment due January , 2017. annual payment includes $3,000 for executory costs. New Port guarantees a $45,000 residual value at the end of the lease term. The estimated economic life of the equipment is 5 years. The fair value of the equipment on January I, 2017 is $250,000. New Port's incremental borrowing rate is 10%, and Scanner's implicit interest rate is 9%, which is known by New Port. New Port uses straight-line depreciation for its plant assets. Required (26 points): (Show computations and round all amounts to the nearest dollar.) a. Prepare a lease amortization schedule over the first 3 years of lease term for New Port. b. Prepare journal entries for the lessee for 2017 and 2018. c. Explain how to report the related assets or liabilities on the company's Balance Sheet as of December 31, 2018.
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