Sweet Limited has signed a lease agreement with Lantus Corp. to lease equipment with an expected lifespan of eight years, no estimated salvage value, and a cost to Lantus, the lessor of $196,000. The terms of the lease are as follows: The lease term begins on January 1, 2019, and runs for 5 years. The lease requires payments of $43,896 at the beginning of each year starting January 1, 2019. At the end of the lease term, the equipment is to be returned to the lessor. Lantus'implied interest rate is 6%, while Sweet's borrowing rate is 7%. Sweet uses straight-line depreciation for similar equipment. The year-end for both companies is December 31. Assume that both companies follow ASPE. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Determine the present value of the minimum lease payments. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Present Value $ List of Accounts Prepare the 2019 journal entries for Sweet Limited. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Date 2019 + (To record inception of lease.) Prepare the 2019 journal entries for Sweet Limited. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Date 2019 (To record inception of lease.) . + (To record lease payment.) + + + (To record interest.) + + (To record depreciation expense.) List of Accounts Sweet Limited has signed a lease agreement with Lantus Corp. to lease equipment with an expected lifespan of eight years, no estimated salvage value, and a cost to Lantus, the lessor of $196,000. The terms of the lease are as follows: The lease term begins on January 1, 2019, and runs for 5 years. The lease requires payments of $43,896 at the beginning of each year starting January 1, 2019. At the end of the lease term, the equipment is to be returned to the lessor. Lantus'implied interest rate is 6%, while Sweet's borrowing rate is 7%. Sweet uses straight-line depreciation for similar equipment. The year-end for both companies is December 31. Assume that both companies follow ASPE. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Determine the present value of the minimum lease payments. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Present Value $ List of Accounts Prepare the 2019 journal entries for Sweet Limited. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Date 2019 + (To record inception of lease.) Prepare the 2019 journal entries for Sweet Limited. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Date 2019 (To record inception of lease.) . + (To record lease payment.) + + + (To record interest.) + + (To record depreciation expense.) List of Accounts
