Monty Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $41,100 each, beginning December 31, 2019. In addition, Monty guarantees the lessor a residual value of $18,400 at the end of the lease. However, Monty believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years. Prepare Montys' December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Monty. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places e.g. 5,275.) Click here to view factor tables. Date Account Titles and Explanation Debit Credit December 31, 2019 (To record the lease liability) December 31, 2019 (To record lease payment)
Monty Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $41,100 each, beginning December 31, 2019. In addition, Monty guarantees the lessor a residual value of $18,400 at the end of the lease. However, Monty believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years.
Prepare Montys' December 31, 2019,
Click here to view factor tables.
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Date
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Account Titles and Explanation
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Debit
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Credit
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December 31, 2019
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(To record the lease liability)
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December 31, 2019
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(To record lease payment)
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the answer 229489 is wrong for the first two entries 41100 for the last two entries is correct
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