Brief Exercise 21A-6

	Your answer is partially correct. Try again.

Kingbird Company leased equipment from Costner Company, beginning on December 31, 2016. The lease term is 4 years and requires equal rental payments of $32,230 at the beginning of each year of the lease, starting on the commencement date (December 31, 2016). The equipment has a fair value at the commencement date of the lease of $120,000, an estimated useful life of 4 years, and no estimated residual value. The appropriate interest rate is 5%. Click here to view the factor table. Prepare Kingbirds 2016 and 2017 journal entries, assuming Kingbird 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
12/31/16	enter an account title To record lease liability on December 31 2016	enter a debit amount	enter a credit amount
	enter an account title To record lease liability on December 31 2016	enter a debit amount	enter a credit amount
	(To record lease liability)
12/31/16	enter an account title To record lease payment on December 31 2016	enter a debit amount	enter a credit amount
	enter an account title To record lease payment on December 31 2016	enter a debit amount	enter a credit amount
	(To record lease payment)
12/31/17	enter an account title To record interest expense on December 31 2017	enter a debit amount	enter a credit amount
	enter an account title To record interest expense on December 31 2017	enter a debit amount	enter a credit amount
	enter an account title To record interest expense on December 31 2017	enter a debit amount	enter a credit amount
	(To record interest expense)
12/31/17	enter an account title To record amortization of the right-of-use asset on December 31 2017	enter a debit amount	enter a credit amount
	enter an account title To record amortization of the right-of-use asset on December 31 2017	enter a debit amount	enter a credit amount
	(To record amortization of the right-of-use asset)

Brief Exercise 21A-6 Your answer is partially correct. Try again. Kingbird Company leased equipment from Costner Company, beginning on December 31, 2016. The lease term is 4 years and requires equal rental payments of $32,230 at the beginning of each year of the lease, starting on the commencement date (December 31, 2016). The equipment has a fair value at the commencement date of the lease of $120,000, an estimated useful life af 4 years, and no estimated residual value. The appropriate interest rate is 5% dick here to view the factor tabla. Prepare Kingbird's 2016 and 2017 journal entries, assuming Kingbird 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 12/31/16 Leased Equipment 7- Lease Liability (To record lease lability) 12/21/16 Lease Liability 100 DD DDD DD (To record lease payment) 12/3/17 interest Expense interest Payable Of Odd On Oce (To record interest expense) 12/31/17 Depredation Expense Accumulated Depreciation Leased Equipment (To record amortization of the right-of-use asset)