January 1, 2020, Bridgeport Company contracts inning of each year, starting January 1, 2020. The a double-declining-balance basis, and the obligat rowing rate is 6%, and the implicit rate in the leas dgeport at the end of the lease. The asset has an e
January 1, 2020, Bridgeport Company contracts inning of each year, starting January 1, 2020. The a double-declining-balance basis, and the obligat rowing rate is 6%, and the implicit rate in the leas dgeport at the end of the lease. The asset has an e
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $146,288 at the
beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $610,000. The asset is to be amortized
on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport's incremental
borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Bridgeport. Title to the equipment transfers to
Bridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.
Click here to view factor tables.
What amounts will appear on the lessee's December 31, 2020, balance sheet relative to the lease contract?
BRIDGEPORT COMPANY
Balance Sheet (Partial)
Assets
$
Liabilities
2$
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f27510b-2dba-4166-bbe5-25e12066f2e9%2Fee0d1cf1-a0af-49dd-9639-51e6cef754bf%2F3ghn8tm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Show Attempt History
Current Attempt in Progress
On January 1, 2020, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $146,288 at the
beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $610,000. The asset is to be amortized
on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport's incremental
borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Bridgeport. Title to the equipment transfers to
Bridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.
Click here to view factor tables.
What amounts will appear on the lessee's December 31, 2020, balance sheet relative to the lease contract?
BRIDGEPORT COMPANY
Balance Sheet (Partial)
Assets
$
Liabilities
2$
$
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