question 6

On January 1, 2020, Wildhorse Company contracts to lease equipment for 5 years, agreeing to make a payment of $151,860 at the beginning of eachyear, starting January 1, 2020. The leased equipment is to be capitalized at $623,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Wildhorse's incremental borrowing rate is 6%, and the implicit rate in the lease is 1196 , which is known by Wildhorse. Title to the equipment transfers to Wildhorse at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Click here to view factor tables. (b) Prepare the journal entries that Wildhorse should record on January 1, 2020. (Credit account titles are outomatically indented whed amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round present value foctor calculations to 5 decimal places, eg. 1.25124 and the final answers to 0 decimal places, es. 5.275