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Sandhill Leasing Company leases a new machine to Wildhorse Corporation. The machine has a cost of $65,000 and fair value of $95,000. Under the 3-year,
Sandhill Leasing Company leases a new machine to Wildhorse Corporation. The machine has a cost of $65,000 and fair value of $95,000. Under the 3-year, non-cancelable contract, Wildhorse will receive title to the machine at the end of the lease. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2025. Sandhill expects to earn an 8% return on its investment, and this implicit rate is known by Wildhorse. The annual rentals are payable on each December 31, beginning December 31, 2025. Click here to view factor tables. (b) (c) (d) (e) Prepare the journal entry at commencement of the lease for Wildhorse, assuming (1) Wildhorse does not know Sandhill's implicit rate (Wildhorse's incremental borrowing rate is 9%), and (2) Wildhorse incurs initial directs costs of $10,000. (List all debit entries before credit entries. 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 titles and enter 0 for the amounts. Round final answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation 1/1/25 Debit Credit
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