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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
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On January Riverbed Company contracts to lease equipment for years, agreeing to make a payment of $ at the beginning of each year, starting January The leased equipment is to be capitalized at $ The asset is to be amortized on a doubledecliningbalance basis, and the obligation is to be reduced on an effectiveinterest basis. Riverbed's incremental borrowing rate is and the implicit rate in the lease is 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 years and no residual value.
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Prepare the journal entries to record amortization of the leased asset and interest expense for the year 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 for the amounts Round answers to decimal places, eg List all debit entries before credit entries
Date Account Titles and Explanation
December
December
Debit
Amortzatlon Expense
RlghtofUse Asset
To record amortization of the leased asset.
Lease Llablity
To record interest on lease payment.
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