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Problem 21-05 Part Level Submission) Wildhorse Leasing Company agrees to lease equipment to Sheffield Corporation on January 1, 2020. The following information relates to the

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Problem 21-05 Part Level Submission) Wildhorse Leasing Company agrees to lease equipment to Sheffield Corporation on January 1, 2020. The following information relates to the lease agreement The term of the lease 7 years with no renewal option and the machinery has an estimated economice of The cost of the machinery is $514000, and the fair value of the set on January 1.2020. is $677.000 At the end olete the s erien and has a granteedidugalue of $55.000. Shedd estimates that the expected residual value at the end of the lease term will be 55,000 Sheffield amortizes all of its legsed e nnemt ons gesine basis The base agrement requires equalannual rental plants, beginning on January 1, 2020 The collectibility of the payments is probable. Wildhorse desires a 10 rate of return on its investments Sheffields Incremental borrowing rate is 11%, and the ( Au theaccounting period ends on December 31.) Click here to view factor tables Prepare the joumal entries Wildhorse would make in 2020 and 2021 related to the lease arrangement. (Credit account les are automatically indented when amount is entered De nolindant manual la entry is re a ct Na Entry answers to decimalecese. 58.972. Record louma Date Det inni ni nanini i Problem 21-06 (Part Level Submission) Wildhorse Leasing Company agrees to lease equipment to Sheffield Corporation on January 1, 2020. The following information relates to the lease agreement The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 The cost of the machinery is $514,000, and the fair value of the asset on January 1, 2020.is $677.000 At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $55,000. Sheffield estimates that the expected residual value at the end of the lease term will be 55,000. Sheffield amortizes all of its leased equipment on a straight-line basis The lease agreement requires equal annual rental payments, beginning on January 1, 2020 The collectibility of the lease payments is probable. Wildhorse desires a 10% rate of retum on its investments Sheffield's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown (Assume the accounting period ends on December 31.) Click here to view factor tables (d) Prepare the journal entries Wildhorse would make in 2020 and 2021 related to the lease arrangement. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account tities and enter for the amounts. Round answers to decimal places e.g. 58,972. Record journal entries in the order presented in the problem.) Date Art wilt Debit in ni Hanni

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