T2. DateAccount Titles and Explanation(To record the lease)(To record lease liability)DebitCredit Laura Leasing Company signs an agreement on January 1, 2025, to lease equipment to Plote Company. The following informationrelates to this agreement.1.2.3.4.5.6.The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5years.The fair value of the asset at January 1, 2025, is $80,000.The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of$10,000, none of which is guaranteed.The agreement requires equal annual rental payments of $24,638.87 to the lessor, beginning on January 1, 2025.The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee.Plote uses the straight-line depreciation method for all equipment.Click here to view factor tables.Prepare all of the journal entries for the lessee for 2025 to record the lease agreement, the lease payments, and all expenses related tothis lease. Assume the lessee's annual accounting period ends on December 31. (For calculation purposes, use 5 decimal places asdisplayed in the factor table provided and round answers to 2 decimal places, e.g. 5,265.25. List all debit entries before credit entries. Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented inthe problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

A lease is an agreement between two parties wherein one party is the lessor who provides assets on…

Prepare all of the journal entries for the lessee for 2025 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answers to 2 decimal places, e.g. 5,265.25. List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Prepare all of the journal entries for the lessee for 2025 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December 31. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round answers to 2 decimal places, e.g. 5,265.25. List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

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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