On January 1, 2022, Blossom Inc., a construction company, leased an excavator from Crane Inc. The lease terms are as follows: ● ● ● Annual lease payments of $20,800 at the beginning of each year for five years At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $10,000 The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee) Blossom Inc. has a December 31 year end Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
On January 1, 2022, Blossom Inc., a construction company, leased an excavator from Crane Inc. The lease terms are as follows: ● ● ● Annual lease payments of $20,800 at the beginning of each year for five years At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $10,000 The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee) Blossom Inc. has a December 31 year end Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 1P: Determining Type of Lease and Subsequent Accounting On January 1, 2019, Ballieu Company leases...
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![On January 1, 2022, Blossom Inc., a construction company, leased an excavator from Crane Inc. The lease terms are as follows:
●
●
●
Annual lease payments of $20,800 at the beginning of each year for five years
At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $10,000
The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee)
Blossom Inc. has a December 31 year end
Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit
account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.
Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the
amounts.)
Date
Account Titles and Explanation
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73b38660-17bd-449b-b5cf-80c2934669ab%2F69d34e19-04e4-49b5-b593-558598238365%2Fwh085q_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, 2022, Blossom Inc., a construction company, leased an excavator from Crane Inc. The lease terms are as follows:
●
●
●
Annual lease payments of $20,800 at the beginning of each year for five years
At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $10,000
The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee)
Blossom Inc. has a December 31 year end
Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Prepare the journal entries for 2022 for Blossom Inc. Assume Blossom Inc. follows IFRS. (List all debit entries before credit entries. Credit
account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275.
Round factor values to 5 decimal places, e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the
amounts.)
Date
Account Titles and Explanation
Debit
Credit
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