Teal Mountain Corporation recorded a right-of-use asset for $284,000 as a result of a finance lease on December 31, 2019. Teal Mountain's incremental borrowing rate is 13%, and the implicit rate of the lessor was not known at the commencement of the lease. Teal Mountain made the first lease payment of $52,373 on on December 31, 2019. The lease requires 8 annual payments. The equipment has a useful life of 8 years with no residual value. Prepare Teal Mountain's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record interest expense)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Teal Mountain Corporation recorded a right-of-use asset for $284,000 as a result of a finance lease on December 31, 2019. Teal
Mountain's incremental borrowing rate is 13%, and the implicit rate of the lessor was not known at the commencement of the lease.
Teal Mountain made the first lease payment of $52,373 on on December 31, 2019. The lease requires 8 annual payments. The
equipment has a useful life of 8 years with no residual value.
Prepare Teal Mountain's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not
indent manually. Round answers to0 decimal places e.g. 5,275.)
Date
Account Titles and Explanation
Debit
Credit
December
31, 2020
(To record interest expense)
December
31, 2020
(To record amortization of the right-of-use asset)
Transcribed Image Text:Teal Mountain Corporation recorded a right-of-use asset for $284,000 as a result of a finance lease on December 31, 2019. Teal Mountain's incremental borrowing rate is 13%, and the implicit rate of the lessor was not known at the commencement of the lease. Teal Mountain made the first lease payment of $52,373 on on December 31, 2019. The lease requires 8 annual payments. The equipment has a useful life of 8 years with no residual value. Prepare Teal Mountain's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record interest expense) December 31, 2020 (To record amortization of the right-of-use asset)
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