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Prepare Blue's 2020 journal entries. (Cred

Prepare Blue's 2020 journal entries. (Cred

FINANCIAL ACCOUNTING
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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On January 1, 2020, Blue Animation sold a truck to Peete, Finance for $40,000 and immediately leased it back. The truck was carried on Blue's books at $35,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Blue at lease end. The lease requires 5 equal rental payments of $9,239 at the end of each year (first payment on January 1, 2018). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Blue's 2020 journal entries. (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. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date 1/1/20 12/31/20 V Account Titles and Explanation eTextbook and Media List of Accounts Save for Later Debit Attempts: 2 of 5 used Credit Submit Answer
Transcribed Image Text:On January 1, 2020, Blue Animation sold a truck to Peete, Finance for $40,000 and immediately leased it back. The truck was carried on Blue's books at $35,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Blue at lease end. The lease requires 5 equal rental payments of $9,239 at the end of each year (first payment on January 1, 2018). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term. Prepare Blue's 2020 journal entries. (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. Record journal entries in the order presented in the problem.) Click here to view factor tables. Date 1/1/20 12/31/20 V Account Titles and Explanation eTextbook and Media List of Accounts Save for Later Debit Attempts: 2 of 5 used Credit Submit Answer
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