Metlock Corporation recorded a right-of-use asset for $268,800 as a result of a finance lease on December 31, 2019. Metlock's incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Metlock made the first lease payment of $51,390 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no residual value. Prepare Metlock'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) December 31, 2020 (To record amortization of the right-of-use asset)

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Chapter1: Financial Statements And Business Decisions
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Metlock Corporation recordeda right-of-use asset for $268,800 as a result of a finance lease on December 31, 2019. Metlock's
incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Metlock
made the first lease payment of $51,390 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a
useful life of 7 years with no residual value.
Prepare Metlock'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)
December 31,
2020
(To record amortization of the right-of-use asset)
Transcribed Image Text:Metlock Corporation recordeda right-of-use asset for $268,800 as a result of a finance lease on December 31, 2019. Metlock's incremental borrowing rate is 11%, and the implicit rate of the lessor was not known at the commencement of the lease. Metlock made the first lease payment of $51,390 on on December 31, 2019. The lease requires 7 annual payments. The equipment has a useful life of 7 years with no residual value. Prepare Metlock'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) December 31, 2020 (To record amortization of the right-of-use asset)
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