On January 1, 2025, Ivanhoe Animation sold a truck to Oriole Finance for $41,000 and immediately leased it back. The truck was carried on Ivanhoe's books at $33,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Ivanhoe at lease-end. The lease requires three equal rental payments of $11,600 at the end of each year (first payment on January 1,2026). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Ivanhoe's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.) Click here to view factor tables.

On January 1, 2025, Ivanhoe Animation sold a truck to Oriole Finance for $41,000 and immediately leased it back. The truck was carried on Ivanhoe's books at $33,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Ivanhoe at lease-end. The lease requires three equal rental payments of $11,600 at the end of each year (first payment on January 1,2026). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Ivanhoe's 2025 journal entries. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.) Click here to view factor tables.

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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