Teal Mountain Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 8 years and requires equal rental payments of $54,782 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $340,000, an estimated useful life of 8 years, and no estimated residual value. The appropriate interest rate is 8%. Click here to view factor tables. Prepare Teal Mountain's 2019 and 2020 journal entries, assuming Teal Mountain depreciates similar equipment it owns on a straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit (To record lease liability) (To record lease payment) (To record interest expense) (To record amortization of the right-of-use asset)
Teal Mountain Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 8 years and requires equal rental payments of $54,782 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $340,000, an estimated useful life of 8 years, and no estimated residual value. The appropriate interest rate is 8%. Click here to view factor tables. Prepare Teal Mountain's 2019 and 2020 journal entries, assuming Teal Mountain depreciates similar equipment it owns on a straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit (To record lease liability) (To record lease payment) (To record interest expense) (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 3E: Lessee Accounting Issues Sax Company signs a lease agreement dated January 1, 2019, that provides...
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![Teal Mountain Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 8 years and
requires equal rental payments of $54,782 at the beginning of each year of the lease, starting on the commencement date
(December 31, 2019). The equipment has a fair value at the commencement date of the lease of $340,000, an estimated useful life
of 8 years, and no estimated residual value. The appropriate interest rate is 8%.
Click here to view factor tables.
Prepare Teal Mountain's 2019 and 2020 journal entries, assuming Teal Mountain depreciates similar equipment it owns on a
straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.
For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0
decimal places, e.g. 5,275.)
Date
Account Titles and Explanation
Debit
Credit
(To record lease liability)
(To record lease payment)
(To record interest expense)
(To record amortization of the right-of-use asset)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4fe3f653-3ae5-418a-81ee-661ed0df38fc%2Fe6cf3371-2de4-439f-8be5-602354b4f5d2%2Fhdl9p4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Teal Mountain Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 8 years and
requires equal rental payments of $54,782 at the beginning of each year of the lease, starting on the commencement date
(December 31, 2019). The equipment has a fair value at the commencement date of the lease of $340,000, an estimated useful life
of 8 years, and no estimated residual value. The appropriate interest rate is 8%.
Click here to view factor tables.
Prepare Teal Mountain's 2019 and 2020 journal entries, assuming Teal Mountain depreciates similar equipment it owns on a
straight-line basis. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.
For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0
decimal places, e.g. 5,275.)
Date
Account Titles and Explanation
Debit
Credit
(To record lease liability)
(To record lease payment)
(To record interest expense)
(To record amortization of the right-of-use asset)
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