Sheffield Incorporated leases a piece of equipment to Shamrock Corporation on January 1, 2025. The lease agreement called for annual rental payments of $5,613 at the beginning of each year of the 4 year lease. The equipment has aneconomic useful life of 6 vears, a fair value of $26,600, a book value of $21,600, and both parties expect a residual value of $8,200 at the end of the lease term. though this amount is not guaranteed. Sheffield set the lease payrnents with the intent of earning a 4% return, and 5 ramrock is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a speciatized nature. Click here to view factor tables (For calculation purposes, use 5 decimal places as displayed in the foctor table provided) (a) Determine the nature of the lease to both Sheffield and Shamrock: The lease is a/an lease to Shetheld. Prepare the lease amortization schedule(s) for Shamrock for all 4 years of the lease. (Round answers to 0 decimal places, e. 5,275 ) Prepare the joumal entries for Shamrock for 2025 and 2026. (List all debit entries before credit entries. Credit account titles ore outomatically indented when the amount is entered. Do not indent manualiy, If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) \begin{tabular}{ll|l|l|l|l|} 1/25 & Lease Liability \end{tabular} Cash (To record lease payment) 12/31/25 Leare Expense Lesse Liability Right-of-Use Asset 1/1/26 Lease Lability cath Leate Expense Leare Liabilicy Richt-of Use Asset 5613 6234990 Suppose Shamrock incurs initial direct costs of $700 related to the lease. Prepare the journal entries for 2025. (List all debit entries before credit entries. Credit occount titles are automaticolly indented when the amount is entered. Do not indent manualik, Record joumal entries in the arder presented in the problem. If no entry is required, select "No Entry" for the occount titles and enter 0 for the amounts.) Sheffield Incorporated leases a piece of equipment to Shamrock Corporation on January 1, 2025. The lease agreement called for annual rental payments of $5,613 at the beginning of each year of the 4 year lease. The equipment has aneconomic useful life of 6 vears, a fair value of $26,600, a book value of $21,600, and both parties expect a residual value of $8,200 at the end of the lease term. though this amount is not guaranteed. Sheffield set the lease payrnents with the intent of earning a 4% return, and 5 ramrock is aware of this rate. There is no bargain purchase option, ownership of the lease does not transfer at the end of the lease term, and the asset is not of a speciatized nature. Click here to view factor tables (For calculation purposes, use 5 decimal places as displayed in the foctor table provided) (a) Determine the nature of the lease to both Sheffield and Shamrock: The lease is a/an lease to Shetheld. Prepare the lease amortization schedule(s) for Shamrock for all 4 years of the lease. (Round answers to 0 decimal places, e. 5,275 ) Prepare the joumal entries for Shamrock for 2025 and 2026. (List all debit entries before credit entries. Credit account titles ore outomatically indented when the amount is entered. Do not indent manualiy, If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) \begin{tabular}{ll|l|l|l|l|} 1/25 & Lease Liability \end{tabular} Cash (To record lease payment) 12/31/25 Leare Expense Lesse Liability Right-of-Use Asset 1/1/26 Lease Lability cath Leate Expense Leare Liabilicy Richt-of Use Asset 5613 6234990 Suppose Shamrock incurs initial direct costs of $700 related to the lease. Prepare the journal entries for 2025. (List all debit entries before credit entries. Credit occount titles are automaticolly indented when the amount is entered. Do not indent manualik, Record joumal entries in the arder presented in the problem. If no entry is required, select "No Entry" for the occount titles and enter 0 for the amounts.)
