Cullumber Incorporated leases a piece of machinery to Bramble Company on January 1, 2020, under the following terms. 1.   The lease is to be for 4 years with rental payments of $15,278 to be made at the beginning of each year. 2.   The machinery’ has a fair value of $80,086, a book value of $59,760, and an economic life of 10 years. 3.   At the end of the lease term, both parties expect the machinery to have a residual value of $29,880. To protect against a large loss, Cullumber requests Bramble to guarantee $21,160 of the residual value, which Irving agrees to do. 4.   The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. 5.   The implicit rate is 5%, which is known by Bramble. 6.   Collectibility of the payments is probable. Click here to view factor tables.     Evaluate the criteria for classification of the lease, and describe the nature of the lease. For the lessee, it is a                                                                        sales-type leasefinance leaseoperating lease, and for the lessor, it is a                                                                        finance leasesales-type leaseoperating lease.   eTextbook and Media Assistance Used List of Accounts                             Prepare the journal entries for Bramble for the year 2020. (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 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1                 (To record lease)     Jan. 1                 (To records first lease payment)     Dec. 31                 (To record accrued interest)     Dec. 31                 (To record amortization expense)       eTextbook and Media List of Accounts                             Prepare the journal entries for Cullumber for the year 2020. (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 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 1                                 (To record lease)     Jan. 1                 (To record first lease payment)     Dec. 31                 (To record lease revenue)

Turner Company signs a lease agreement on January 1, 2024, to lease equipment to Holmgren Company. The term of the non-cancelable lease is 5 years, and annual payments are required at the beginning of each year. The following information relates to this agreement. -Holmgren has the option to purchase the equipment for $11,000 upon termination of the lease. It is reasonably certain that Holmgren will exercise this option (i.e. it is a bargain purchase). - The equipment has a cost of $118,000 and fair value of $186,000 to Turner. Its useful economic life is 10 years. What annual rental amount will Williamson charge if it desires to earn a return of 7% on its investment?

On January 1, 2019, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: • The lease is noncancelable and has a term of 8 years. • The annual rentals are $39,200, payable at the beginning of each year. • The interest rate implicit in the lease is 11%. • Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for $1 at the end of the lease term, December 31, 2026. • The cost of the equipment to the lessor is $145,500, and the fair value is approximately $223,900. • Ballieu incurs no material initial direct costs. • It is probable that Ballieu will collect the lease payments. • Ballieu estimates that the fair value is expected to be significantly greater than $1 at the end of the lease term.   Ballieu calculates that the present value on January 1, 2019, of 8 annual payments in advance of $39,200 discounted at…

Blossom, Inc. leases a piece of equipment to Wildhorse Company on January 1, 2025. The contract stipulates a lease term of 5 years, with equal annual rental payments of $8,880 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. The asset has a fair value of $48,000, a book value of $43,000, and a useful life of 8 years. At the end of the lease term, Blossom expects the residual value of the asset to be $12,000, and this amount is guaranteed by a third party. Assuming Blossom wants to earn a 5% return on the lease and collectibility of the lease payments is probable, record its journal entry at the commencement of the lease on January 1, 2025. (List all debit entries before credit entries. Credit account titles are automatically