FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Kingbird Company leased equipment from Costner Company, beginning on December 31, 2019. The lease term is 5 years and requires equal rental payments of $78,002 at the beginning of each year of the lease, starting on the commencement date (December 31, 2019). The equipment has a fair value at the commencement date of the lease of $320,000, an estimated useful life of 5 years, and no estimated residual value. The appropriate interest rate is 11%.

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Prepare Kingbird’s 2019 and 2020 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
(To record lease liability)
(To record lease payment)
(To record interest expense)
(To record amortization of the right-of-use asset)
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Transcribed Image Text:Date Account Titles and Explanation Debit Credit (To record lease liability) (To record lease payment) (To record interest expense) (To record amortization of the right-of-use asset)
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