Blossom enters into an agreement with Crane Inc. to lease a car on December 31, 2024....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Blossom enters into an agreement with Crane Inc. to lease a car on December 31, 2024. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term. 2. The fair value of the car was $16,083 at commencement of the lease. 3. 4. Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2025. The first payment is to be of an amount of $5,953.73, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $6,251.42 and the third and final payment will be $6,563.99). Blossom' incremental borrowing rate is 8%. The rate implicit in the lease is unknown. 5. Blossom uses straight-line depreciation for all similar cars. (a) Prepare Blossom' journal entries for 2024, 2025, and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date 12/31/24 12/31/25 Account Titles and Explanation eTextbook and Media (To record lease payment) (To record amortization of the right-of-use asset) (To record lease payment) (To record amortization of the right-of-use asset) Debit Credit Blossom enters into an agreement with Crane Inc. to lease a car on December 31, 2024. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal or bargain purchase option. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term. 2. The fair value of the car was $16,083 at commencement of the lease. 3. 4. Annual payments are required to be made on December 31 at the end of each year of the lease, beginning December 31, 2025. The first payment is to be of an amount of $5,953.73, with each payment increasing by a constant rate of 5% from the previous payment (i.e., the second payment will be $6,251.42 and the third and final payment will be $6,563.99). Blossom' incremental borrowing rate is 8%. The rate implicit in the lease is unknown. 5. Blossom uses straight-line depreciation for all similar cars. (a) Prepare Blossom' journal entries for 2024, 2025, and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 2 decimal places, e.g. 5,275.25. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date 12/31/24 12/31/25 Account Titles and Explanation eTextbook and Media (To record lease payment) (To record amortization of the right-of-use asset) (To record lease payment) (To record amortization of the right-of-use asset) Debit Credit
Expert Answer:
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
DU Journeys enters into an agreement with Traveler plc to lease a car on December 31, 2018. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years...
-
DU Journeys enters into an agreement with Traveler plc to lease a car on December 31, 2021. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years...
-
Coin Flips You flip a coin 100 times and get 58 heads and 42 tails. Calculate the chi-square statistic by hand showing your work, assuming the coin is fair.
-
The system of Advanced Problem APlO.l is to have a percent overshoot less than 13%. In addition, we desire that the steady-state error for a unit ramp input will be less than 0.125 (Kv = 8) [24]....
-
A potter's wheel with a moment of inertia 37.0 [kgm2] is spinning freely at 46.0 [rpm]. The potter drops a lump of clay onto the wheel, where it sticks a distance 1.70 [m] from the rotational axis....
-
An inexperienced accountant prepared this condensed income statement for McDowell Company, a retail firm that has been in business for a number of years. As an experienced, knowledgeable accountant,...
-
A company has a fiscal year-end of December 31: (1) on October 1, $25,000 was paid for a one-year fire insurance policy; (2) on June 30 the company loaned its chief financial officer $23,000;...
-
Calculate the number average and weight average relative molecu- lar mass for a sample of polystyrene made by blending eight separate fractions, each of which has a very narrow molecular mass...
-
example of estimating costs for a used machine, assume you just bought a 25-foot chisel plow that was 8 years old for $24,000. It appeared to be clean and in good mechanical condition. Since you do...
-
A car on a roller coaster starts at zero speed at an elevation above the ground of 26m. It coasts down a slope, and then climbs a hill. The top of the hill is at an elevation of 10m. What is the...
-
Applied Medical Services buys a diagnostic piece of equipment for $326,000. The machine will be depreciated on a straight-line basis for 10 years with a salvage value of $75,000. The company expects...
-
Give full explanation Explain how an investor in a BB+ rated corporate bond might benefit from the issuing company's strong current and future earnings even though the bond's coupon is fixed.
-
The bulk modulus of hydraulic oil is 2.50 GPa @ 20.0 C. How much pressure would be required to produce a 1.45% change in the volume? Enter your answer in MPa. Solve the problem step by step. Explain...
-
Read the chapter Data Communications and Networking, and write a summary in which you address the following: Explain the basics of sending/receiving e-mail? Explain the basics of VOIP. Explain the...
-
Aztec Furnishings makes hand-crafted furniture for sale in its retail stores. The furniture maker has recently installed a new assembly process, including a new sander and polisher. With this new...
-
Find the value of z 0.10 . Approach We wish to find the z-value such that the area under the standard normal curve to the right of the z-value is 0.10.
-
z 0.02 Find the value of z .
-
The data in Table 4 represent the finishing time (in seconds) for six randomly selected races of a greyhound named Barbies Bomber in the 5/16 -mile race at Greyhound Park in Dubuque, Iowa. Is there...
Study smarter with the SolutionInn App