Wildhorse Corporation agrees on January 1, 2025, to lease equipment from Blossom, Inc. for 3 years....

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Wildhorse Corporation agrees on January 1, 2025, to lease equipment from Blossom, Inc. for 3 years. The lease calls for annual lease payments of $24,500 at the beginning of each year. The lease does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. In addition, the economic life of the equipment is 10 years, and the present value of the lease payments is less than 90% of the fair value of the equipment. Assume that for Blossom, Inc., the lessor, the collectibility of the lease payments is probable, and the fair value and cost of the equipment is $209,000. Prepare Blossom 2025 journal entries, assuming the company uses straight-line depreciation and no salvage value. (List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date (To record the recognition of the revenue each period) Debit Credit Wildhorse Corporation agrees on January 1, 2025, to lease equipment from Blossom, Inc. for 3 years. The lease calls for annual lease payments of $24,500 at the beginning of each year. The lease does not transfer ownership, contain a bargain purchase option, and is not a specialized asset. In addition, the economic life of the equipment is 10 years, and the present value of the lease payments is less than 90% of the fair value of the equipment. Assume that for Blossom, Inc., the lessor, the collectibility of the lease payments is probable, and the fair value and cost of the equipment is $209,000. Prepare Blossom 2025 journal entries, assuming the company uses straight-line depreciation and no salvage value. (List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date (To record the recognition of the revenue each period) Debit Credit

Answer rating: 100% (QA)

Date January 1 2025 Lease Receivable Debit 209000 Equipment Credit 209000 To record the lease of equ... View the full answer