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On January 1, 2022, Crane Inc., a construction company, leased an excavator from Cullumber Inc. The lease terms are as follows: ● ● ● ● Annual lease payments of $28,600 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 $11,900 The incremental borrowing rate is 6% and the implicit rate in the lease is 5% (known by the lessee) Crane 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 Crane Inc. Assume Crane Inc. follows IFRS. (List all debit entries before credit entries. Credit account ti 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 fo Account Titl nation Dobit Credit

On January 1, 2022, Crane Inc., a construction company, leased an excavator from Cullumber Inc. The lease terms are as follows: ● ● ● ● Annual lease payments of $28,600 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 $11,900 The incremental borrowing rate is 6% and the implicit rate in the lease is 5% (known by the lessee) Crane 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 Crane Inc. Assume Crane Inc. follows IFRS. (List all debit entries before credit entries. Credit account ti 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 fo Account Titl nation Dobit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2022, Crane Inc., a construction company, leased an excavator from Cullumber Inc. The lease terms are as follows: Annual lease payments of $28,600 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 $11,900 The incremental borrowing rate is 6% and the implicit rate in the lease is 5% (known by the lessee) Crane 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 Crane Inc. Assume Crane Inc. follows IFRS. (List all debit entries before credit entries. Credit account title 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 t Date Jan. 1, 2022 Dec. 31, 2022 Dec. 31, 2022 Account Titles and Explanation Right-of-Use Asset Lease Liability Cash Depreciation Expense Accumulated Depreciation - Right-of-Use Asset (To record depreciation) Interest Expense Lease Liability (To record interest) Debit 139338 27868 H 5537 Credit 110738 28,600 27868 5537
Transcribed Image Text:On January 1, 2022, Crane Inc., a construction company, leased an excavator from Cullumber Inc. The lease terms are as follows: Annual lease payments of $28,600 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 $11,900 The incremental borrowing rate is 6% and the implicit rate in the lease is 5% (known by the lessee) Crane 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 Crane Inc. Assume Crane Inc. follows IFRS. (List all debit entries before credit entries. Credit account title 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 t Date Jan. 1, 2022 Dec. 31, 2022 Dec. 31, 2022 Account Titles and Explanation Right-of-Use Asset Lease Liability Cash Depreciation Expense Accumulated Depreciation - Right-of-Use Asset (To record depreciation) Interest Expense Lease Liability (To record interest) Debit 139338 27868 H 5537 Credit 110738 28,600 27868 5537
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