Assume that on December $31,2024,$ Blossom Aerospace signs a $8-$year, non$-$cancelable lease agreement to lease a hanger from Aero Field Management Company. The following information pertains to this lease agreement:

The agreement requires equal rental payments of $$161,178$ beginning on December $31,2024.$

The fair value of the building on December $31,2024$ is $$1,092,117.$

The building has an estimated economic life of $10$ years, a guaranteed residual value of $$49,700,$ and an expected residual value of $$34,800.$ Blossom depreciates similar buildings on the straight$-$line method.

The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.

Blossom's incremental borrowing rate is $6\%$ per year. The lessor's implicit rate is not known by Blossom.

Date

Account Titles and Explanation

Debit

Credit

$($To record the lease$)$

$($To record first lease payment$)$

$$

$$

$$

$($To record amortization of the right$-$of$-$use asset$)$

$$

$$

$($To record second lease payment$)$

$$

$$

$($To record amortization of the right$-$of$-$use asset$)$

$$

$($To record third lease payment$)$