On December 31, 2024, Shamrock corporation signed a 5-year, non - cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $8,215 at the beginning of each year, starting December 31, 2024. The machine has an estimated useful life of 6 years and a $5, 200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrock's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. Prepare all necessary journal entries for shamrock for this lease through December 31, 2025.

On December 31, 2024, Shamrock corporation signed a 5-year, non - cancelable lease for a machine. The terms of the lease called for Shamrock to make annual payments of $8,215 at the beginning of each year, starting December 31, 2024. The machine has an estimated useful life of 6 years and a $5, 200 unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Shamrock uses the straight-line method of depreciation for all of its plant assets. Shamrock's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. Prepare all necessary journal entries for shamrock for this lease through December 31, 2025.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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