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Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)

Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)

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, 2022, Blossom Inc., a construction company, leased an excavator from Crane Inc. The lease terms are as follows: • Annual lease payments of $23,600 at the beginning of each year for five years At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $12,000 The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee) Blossom Inc. has a December 31 year end Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date 1. 1, 2022 Account Titles and Explanation Right-of-Use Asset Lease Liability Cash c. 31, 2022 Depreciation Expense Accumulated Depreciation - Right-of-Use Asset (To record depreciation) c. 31, 2022 Interest Expense Lease Liability (To record interest) Debit 114301 90701 22860 5442 Credit 23600 22860 5442
Transcribed Image Text:On January 1, 2022, Blossom Inc., a construction company, leased an excavator from Crane Inc. The lease terms are as follows: • Annual lease payments of $23,600 at the beginning of each year for five years At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $12,000 The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee) Blossom Inc. has a December 31 year end Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date 1. 1, 2022 Account Titles and Explanation Right-of-Use Asset Lease Liability Cash c. 31, 2022 Depreciation Expense Accumulated Depreciation - Right-of-Use Asset (To record depreciation) c. 31, 2022 Interest Expense Lease Liability (To record interest) Debit 114301 90701 22860 5442 Credit 23600 22860 5442
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