Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Crane Corp will record for the right- of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 5,275.76.) The amount of the right-of-use asset $ 188999.91 Prepare the initial entry to reflect the signing of the lease agreement. (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. Round answers to 2 decimal places, e.g. 5,125.76.) Date Account Titles and Explanation July 1, Right-of-Use Asset 2023 Insurance Expense Cash Lease Liability Debit 188999.91 Credit 58000 137543.5 On July 1, 2023, Crane Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Blossom Ltd. The following information concerns the lease agreement. 1. The equipment's fair value on July 1, 2023 is $259,000. نه 3. The agreement requires equal rental payments of $58,000.00 beginning on July 1, 2023. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $93,000. Crane Corp. depreciates similar equipment using the straight-line method, with no residual value. 4. The lease is non-renewable. At the termination of the lease, the equipment reverts to Blossom. 5. 6. Crane's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Crane Corp. The yearly rental payment includes $6,543.59 of executory costs related to insurance on the equipment. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Crane Corp will record for the right- of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 5,275.76.) The amount of the right-of-use asset $ 188999.91 Prepare the initial entry to reflect the signing of the lease agreement. (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. Round answers to 2 decimal places, e.g. 5,125.76.) Date Account Titles and Explanation July 1, Right-of-Use Asset 2023 Insurance Expense Cash Lease Liability Debit 188999.91 Credit 58000 137543.5 On July 1, 2023, Crane Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Blossom Ltd. The following information concerns the lease agreement. 1. The equipment's fair value on July 1, 2023 is $259,000. نه 3. The agreement requires equal rental payments of $58,000.00 beginning on July 1, 2023. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $93,000. Crane Corp. depreciates similar equipment using the straight-line method, with no residual value. 4. The lease is non-renewable. At the termination of the lease, the equipment reverts to Blossom. 5. 6. Crane's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Crane Corp. The yearly rental payment includes $6,543.59 of executory costs related to insurance on the equipment. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount Crane Corp will record for the right-
of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g.
5,275.76.)
The amount of the right-of-use asset
$
188999.91
Prepare the initial entry to reflect the signing of the lease agreement. (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. Round answers to 2 decimal places, e.g. 5,125.76.)
Date
Account Titles and Explanation
July 1,
Right-of-Use Asset
2023
Insurance Expense
Cash
Lease Liability
Debit
188999.91
Credit
58000
137543.5
Transcribed Image Text:On July 1, 2023, Crane Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Blossom
Ltd. The following information concerns the lease agreement.
1. The equipment's fair value on July 1, 2023 is $259,000.
نه
3.
The agreement requires equal rental payments of $58,000.00 beginning on July 1, 2023.
The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $93,000. Crane Corp.
depreciates similar equipment using the straight-line method, with no residual value.
4.
The lease is non-renewable. At the termination of the lease, the equipment reverts to Blossom.
5.
6.
Crane's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Crane Corp.
The yearly rental payment includes $6,543.59 of executory costs related to insurance on the equipment.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.
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