The following facts pertain to a noncancelable lease agreement between Sycamore Leasing Company and Redbird Company,...

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The following facts pertain to a noncancelable lease agreement between Sycamore Leasing Company and Redbird Company, a lessee: Inception date Annual lease pmt. due at the beg. of each year, beginning with January 1, 2023 Residual value of the equipment at the end of lease term, guaranteed by the lessee January 1, 2023 $113,864 $50,000 Expected Residual value equipment at end of lease term Lease term Economic life of leased equipment Fair value of equipment at January 1, 2023 Lessor's implicit rate Lessee's incremental borrowing rate $45,000 6 years 6 years $600,000 8% 8% The equipment will revert to the lessor at the end of the lease term. The lessee uses straight-line amortization for all leased equipment. Required: 1. Prepare a lease amortization table for Redbird for the life of the lease (note the probable residual value payment should be the last line of the table before the total figures). See illustration 21.22 in the text for an example to follow. 2. Prepare the appropriate journal entries for Redbird on 1/1/23 and 12/31/23 3. Show what would be reported on the 12-31-23 balance sheet for this lease for non-current assets, current and long-term liabilities. Show what would be reported by Redbird in their 2023 income statement for interest expense and amortization expense for this lease. The following facts pertain to a noncancelable lease agreement between Sycamore Leasing Company and Redbird Company, a lessee: Inception date Annual lease pmt. due at the beg. of each year, beginning with January 1, 2023 Residual value of the equipment at the end of lease term, guaranteed by the lessee January 1, 2023 $113,864 $50,000 Expected Residual value equipment at end of lease term Lease term Economic life of leased equipment Fair value of equipment at January 1, 2023 Lessor's implicit rate Lessee's incremental borrowing rate $45,000 6 years 6 years $600,000 8% 8% The equipment will revert to the lessor at the end of the lease term. The lessee uses straight-line amortization for all leased equipment. Required: 1. Prepare a lease amortization table for Redbird for the life of the lease (note the probable residual value payment should be the last line of the table before the total figures). See illustration 21.22 in the text for an example to follow. 2. Prepare the appropriate journal entries for Redbird on 1/1/23 and 12/31/23 3. Show what would be reported on the 12-31-23 balance sheet for this lease for non-current assets, current and long-term liabilities. Show what would be reported by Redbird in their 2023 income statement for interest expense and amortization expense for this lease.

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1 Lease Amortization Table for Redbird Year Beginning Lease Liability Lease Payment Interest Expense ... View the full answer