Indigo Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $144,000 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $48,800 payable each December 31, beginning December 31, 2019. An interest rate of 9% is implicit in the lease agreement. Collectibility of the rentals is not probable. Prepare any journal entry for Indigo on December 31, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Indigo Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $144,000 to
manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $48,800 payable
each December 31, beginning December 31, 2019. An interest rate of 9% is implicit in the lease agreement. Collectibility of the rentals
is not probable.
Prepare any journal entry for Indigo on December 31, 2019. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
Transcribed Image Text:Indigo Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $144,000 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires five equal annual rentals of $48,800 payable each December 31, beginning December 31, 2019. An interest rate of 9% is implicit in the lease agreement. Collectibility of the rentals is not probable. Prepare any journal entry for Indigo on December 31, 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
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