Answered step by step
Verified Expert Solution
Question
1 Approved Answer
pls help im very stuck Culver Corporation agrees on January 1, 2020, to lease equipment from Packers, Inc. for 3 years. The lease calls for
pls help im very stuck
Culver Corporation agrees on January 1, 2020, to lease equipment from Packers, Inc. for 3 years. The lease calls for annual lease payments of $ 19,500 at the beginning of each year. The lease does not transfer ownership contain a bargain purchase option, and is not a specialized asset. In addition, the economic life of the equipment is 10 years, and the present value of the lease payments is less than 90% of the fair value of the equipment. Prepare Culver journal entries on January 1, 2020 (commencement of the operating lease), and on December 31, 2020. Assume the implicit rate used by the lessor is 6%, and this is known to Culver. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to "O* decimal places, eg,5,275. Record journal entries in the order presented in the problem.) Click here to view factor tables. Debit Credit Date Account Titles and Explanation 55251 1/1/20 Right-of-Use Asset 55251 Lease Liability (To record lease liability) 19500 1/1/20 Lease Liability 19500 Cash (To record lease payment) Date Account Titles and Explanation Debit Credit 1/1/20 Right-of-Use Asset 55251 55251 Lease Liability (To record lease liability) 1/1/20 Lease Liability 19500 19500 Cash (To record lease payment) 19500 12/31/20 Lease Expense 18396 Lease Liability 1104 Right-of-Use Asset Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started