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Question 3 of 5 0 . 2 1 On January 1 , 2 0 2 5 . Riverbed Company contracts to lease equipment for 5

Question 3 of 5
0.21
On January 1,2025. Riverbed Company contracts to lease equipment for 5 years, agreeing to make a payment of $141,542 at the beginning of each year, starting January 1,2025. The leased equipment is to be capitalized at $632,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Riverbed's incremental borrowing rate is 7%, and the implicit rate in the lease is 6%, which is known by Riverbed. Title to the equipment transfers to Riverbed at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.
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(b).
(c)
Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025.(Credit account titles are cutomatically indented when amount is entered. Do not indent manuolly if no entry is required, select "No Entry" for the account titles and enter 0 for the amounts Round answers to 0 decimal places, eg.5,275. List all debit entries before credit entries)
Date Account Titles and Explanation
December 31,2025
December 31,2025
Debit
Amort/zatlon Expense
Rlght-of-Use Asset
(To record amortization of the leased asset.)
Lease Llablity
(To record interest on lease payment.)

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