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Sunland Warehouse Corporation recorded a right-of-use asset for $240,000 as a result of a finance lease on December 31, 2016. Sunland Warehouses incremental borrowing rate
Sunland Warehouse Corporation recorded a right-of-use asset for $240,000 as a result of a finance lease on December 31, 2016. Sunland Warehouses incremental borrowing rate is 7%, and the implicit rate of the lessor was not known at the commencement of the lease. Sunland Warehouse Corporation made the first lease payment of $54,700 on December 31, 2016. The lease requires 5 annual payments. The equipment has a useful life of 5 years with no residual value. Prepare Sunland Warehouse Corporations December 31, 2017 adjusting entries.
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