Help, I need help to figure out what goes in the Lease receivable, Interest Revenue journal entries, Please Help Prepare the journal entries Vaughn would make in 2025 and 2026 related to the lease arrangement. Vaughn Leasing Company agrees to lease equipment to Bramble Corporation on January 1, 2025. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $575,000, and the fair value of the asset on January 1, 2025, is $755,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Bramble estimates that the expected residual value at the end of the lease term will be $50,000, Bramble amortizes all of its leased equipment on a straight-line basis. The lease agreement requires equal annual rental payments, beginning on January 1, 2025. 4. 5. The collectibility of the lease payments is probable. 6. Vaughn desires a 9% rate of return on its investments. Bramble's incremental borrowing rate is 10%, and the lessor's implicit rate is unknown.
Help, I need help to figure out what goes in the Lease receivable, Interest Revenue journal entries, Please Help Prepare the journal entries Vaughn would make in 2025 and 2026 related to the lease arrangement. Vaughn Leasing Company agrees to lease equipment to Bramble Corporation on January 1, 2025. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $575,000, and the fair value of the asset on January 1, 2025, is $755,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Bramble estimates that the expected residual value at the end of the lease term will be $50,000, Bramble amortizes all of its leased equipment on a straight-line basis. The lease agreement requires equal annual rental payments, beginning on January 1, 2025. 4. 5. The collectibility of the lease payments is probable. 6. Vaughn desires a 9% rate of return on its investments. Bramble's incremental borrowing rate is 10%, and the lessor's implicit rate is unknown.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Help, I need help to figure out what goes in the Lease receivable, Interest Revenue journal entries, Please Help Prepare
the journal entries Vaughn would make in 2025 and 2026 related to the lease arrangement.
Vaughn Leasing Company agrees to lease equipment to Bramble Corporation on January 1, 2025. The following information
relates to the lease agreement.
1.
The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years.
2.
The cost of the machinery is $575,000, and the fair value of the asset on January 1, 2025, is $755,000.
3.
At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Bramble
estimates that the expected residual value at the end of the lease term will be $50,000, Bramble amortizes all of its
leased equipment on a straight-line basis.
The lease agreement requires equal annual rental payments, beginning on January 1, 2025.
4.
5.
The collectibility of the lease payments is probable.
6.
Vaughn desires a 9% rate of return on its investments. Bramble's incremental borrowing rate is 10%, and the lessor's
implicit rate is unknown.
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