On January 1, 2025, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $128,104 at thebeginning of each year, starting January 1, 2025. The leased equipment is to be capitalized at $572,000. The asset is to be amortizedon a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport's incrementalborrowing rate is 7%, and the implicit rate in the lease is 6%, which is known by Bridgeport. Title to the equipment transfers toBridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025. (Credit accounttitles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts. Round answers to 0 decimal places, eg. 5,275. List all debit entries before credit entries.)Date Account Titles and Explanationcember2025cember2025Amortization ExpenseRight-of-Use Asset(To record amortization of the leased asset.)Interest ExpenseLease Liability(To record interest on lease payment.)DebitCredit

Date. Account title. Debit. Credit December 31 Amortization exp. 228800…

Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025. (Credit account titles are automatically indented when 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 answers to 0 decimal places, eg. 5,275. List all debit entries before credit entries) Date Account Titles and Explanation cember 2025 cember 2025 Amortization Expense Right-of-Use Asset (To record amortization of the leased asset.) Interest Expense Lease Liability (To record interest on lease payment.) Debit Credit 11 11

Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025. (Credit account titles are automatically indented when 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 answers to 0 decimal places, eg. 5,275. List all debit entries before credit entries) Date Account Titles and Explanation cember 2025 cember 2025 Amortization Expense Right-of-Use Asset (To record amortization of the leased asset.) Interest Expense Lease Liability (To record interest on lease payment.) Debit Credit 11 11

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6P

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