Question: E20.9 (LO 2, 4) (Lessee Entries, Initial Direct Costs) Use the information for Crosley Company in E20.8. Assume that Dexter Corporation does not know the

E20.9 (LO 2, 4) (Lessee Entries, Initial Direct Costs) Use the information for Crosley Company in E20.8. Assume that Dexter Corporation does not know the rate implicit in the lease used by Crosley, and Dexter’s incremental borrowing rate is 8%. In addition, assume that Dexter incurs initial direct costs of $15,000.

Instructions

a. Compute the amount of the lease liability and right-of-use asset for Dexter.

b. Prepare all necessary journal entries for Dexter for 2025.

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