2...The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Splish Company, a lessee.Commencement date January 1, Annual lease payment due at the beginning of each year, beginning with January 1, $119,127 Residual value of equipment at end of lease term, guaranteed by the lessee $54,000 Expected residual value of equipment at end of lease term $49,000 Lease term 6yearsEconomic life of leased equipment 6yearsFair value of asset at January 1, $659,000 Lessor’s implicit rate 6%Lessee’s incremental borrowing rate Prepare all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. (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 e.g. 5,275. Record journal entries in the order presented in the problem.)DateAccount Titles and ExplanationDebitCreditchoose a transaction date enter an account title to record the leaseenter a debit amountenter a credit amount enter an account title to record the leaseenter a debit amountenter a credit amount (To record the lease.) choose a transaction date enter an account title to record first lease paymententer a debit amountenter a credit amount enter an account title to record first lease paymententer a debit amountenter a credit amount (To record first lease payment.) choose a transaction date enter an account title to record interestenter a debit amountenter a credit amount enter an account title to record interestenter a debit amountenter a credit amount (To record interest.) choose a transaction date enter an account title to record amortizationenter a debit amountenter a credit amount enter an account title to record amortizationenter a debit amountenter a credit amount (To record amortization.) choose a transaction date enter an account title to record second lease paymententer a debit amountenter a credit amount enter an account title to record second lease paymententer a debit amountenter a credit amount (To record second lease payment.) choose a transaction date enter an account title to record interestenter a debit amountenter a credit amount enter an account title to record interestenter a debit amountenter a credit amount (To record interest.) choose a transaction date enter an account title to record amortizationenter a debit amountenter a credit amount enter an account title to record amortizationenter a debit amountenter a credit amount (To record amortization.) Save for Later Attempts: 0 of 1 usedSubmit Answer (c)The parts of this question must be completed in order. This part will be available when you complete the part above.

It is an arrangement between two parties in which one party (lessor) allows another party (lessee)…

Answered: The following facts pertain to a…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.9E: Leased Assets Koffman and Sons signed a four-year lease for a forklift on January 1, 2016. Annual...

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The following facts pertain to a non-cancelable lease agreement between Faldo Leasing Company and Splish Company, a lessee.

Commencement date	January 1,
Annual lease payment due at the beginning of each year, beginning with January 1,	$119,127
Residual value of equipment at end of lease term, guaranteed by the lessee	$54,000
Expected residual value of equipment at end of lease term	$49,000
Lease term	6	years
Economic life of leased equipment	6	years
Fair value of asset at January 1,	$659,000
Lessor’s implicit rate	6	%
Lessee’s incremental borrowing rate

Prepare all of the journal entries for the lessee for and to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. (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 e.g. 5,275. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
choose a transaction date	enter an account title to record the lease	enter a debit amount	enter a credit amount
	enter an account title to record the lease	enter a debit amount	enter a credit amount
	(To record the lease.)
choose a transaction date	enter an account title to record first lease payment	enter a debit amount	enter a credit amount
	enter an account title to record first lease payment	enter a debit amount	enter a credit amount
	(To record first lease payment.)
choose a transaction date	enter an account title to record interest	enter a debit amount	enter a credit amount
	enter an account title to record interest	enter a debit amount	enter a credit amount
	(To record interest.)
choose a transaction date	enter an account title to record amortization	enter a debit amount	enter a credit amount
	enter an account title to record amortization	enter a debit amount	enter a credit amount
	(To record amortization.)
choose a transaction date	enter an account title to record second lease payment	enter a debit amount	enter a credit amount
	enter an account title to record second lease payment	enter a debit amount	enter a credit amount
	(To record second lease payment.)
choose a transaction date	enter an account title to record interest	enter a debit amount	enter a credit amount
	enter an account title to record interest	enter a debit amount	enter a credit amount
	(To record interest.)
choose a transaction date	enter an account title to record amortization	enter a debit amount	enter a credit amount
	enter an account title to record amortization	enter a debit amount	enter a credit amount
	(To record amortization.)

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