the end of the lease, Blossom has the option to buy the equipment for $$5,000,$ considerably below its estimated fair value at that time.

The equipment has an estimated useful life of $7$ years, with no salvage value. Blossom uses the straight$-$line method of depreciation on

similar owned equipment.

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Your answer is partially correct.

Prepare the journal entries, that Blossom should record on December $31,2025.($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 present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answers to $0$ decimal places, e$.$g$.58,971.$

List all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credit

December

$31,2025$

Right$-$of$-$Use Asset

$($To record leased asset and related liability.$)$

December

$31,2025$

$($To record the first rental payment.$)$

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List of Accounts

Your answer is partially correct.

Prepare the journal entries, that Blossom should record on December $31,2026.($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. List all debit entries before credit entries.$)$

$($To record annual payment on lease liability.$)$