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Questions of 6 2.86/15 lli On January 1, 2020. Larkspur Co.leased a building to Crane Inc. The relevant information related to the bease is as

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Questions of 6 2.86/15 lli On January 1, 2020. Larkspur Co.leased a building to Crane Inc. The relevant information related to the bease is as follows The lease arrangement is for 10 years. The building is expected to have a residual value at the end of the lease of $3.700.000 (unguaranteed) The leased building has a cost of $1.200.000 and was purchased for cash on January 1, 2020 The building is depreciated on a straight-line basis. Its estimated economic life is so years with no salvage vakle Lease payments are 5275.000 per year and are made at the beginning of the year. Crane has an incremental borrowing rate of 5%, and the rate implicit in the lease bunknown to Crane. Both the lessor and the lesse are on a calendar year basis, 2 3 4. S. 6 Click here to view actor tables (For cakulation purposes, use 5 decimal places es displayed in the factor table provided) You were partially correct Prepare the journal entries that Larkspur should make in 2020. Creditoccountitler utomatically indented when amounts entered. Do not indent manually. Record journal entries in the order presented to the problem Date Account Tities and Explanation Debar Credit 1044 Use To record cost of the buildinol Tour des princ Prepare the journal entries that Larkspur should make in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 1/1/20 Lease Receivable 1848468 13 Right-of-Use Asset (To record cost of the building) Cash 11/20 275000 Lease Receivable (To record receipt of lease payment) 12/31/20 Lease Receivable 78673 Interest Revenue (To record the recognition of the revenue each period) Depreciation Expense 12/31/20 184847 RihtofUst Asset (To record depreciation expense on the leased asset)

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