Tamarisk Corporation recorded a right-of-use asset for $259,700 as a result of a finance lease on December 31, 2019. Tamarisk’s incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Tamariskmade the first lease payment of $49,651 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no residual value. Prepare Tamarisk's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount enter an account title to record interest expense enter a debit amount enter a credit amount (To record interest expense) December 31, 2020 enter an account title to record amortization of the right-of-use asset enter a debit amount enter a credit amount enter an account title to record amortization of the right-of-use asset enter a debit amount enter a credit amount (To record amortization of the right-of-use asset)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 1E: Determining Type of Lease and Subsequent Accounting On January 1, 2019, Caswell Company signs a...

See similar textbooks

Related questions

Concept explainers

Question

100%

Tamarisk Corporation recorded a right-of-use asset for $259,700 as a result of a finance lease on December 31, 2019. Tamarisk’s incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Tamariskmade the first lease payment of $49,651 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no residual value.

Prepare Tamarisk's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020	enter an account title to record interest expense	enter a debit amount	enter a credit amount
	enter an account title to record interest expense	enter a debit amount	enter a credit amount
	enter an account title to record interest expense	enter a debit amount	enter a credit amount
	(To record interest expense)
December 31, 2020	enter an account title to record amortization of the right-of-use asset	enter a debit amount	enter a credit amount
	enter an account title to record amortization of the right-of-use asset	enter a debit amount	enter a credit amount
	(To record amortization of the right-of-use asset)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.