Prepare Cullumbers' December 31, 2024, journal entries, assuming the implicit rate of the lease is 10% and this is known to Cullumber. (List all debit entries before credit entries. Credit account titles are automatically indented when 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 0 decimal places eg. 5,275.)
Prepare Cullumbers' December 31, 2024, journal entries, assuming the implicit rate of the lease is 10% and this is known to Cullumber. (List all debit entries before credit entries. Credit account titles are automatically indented when 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 0 decimal places eg. 5,275.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ashish lodo
Transcribed Image Text:Cullumber Corporation enters into a 6-year lease of equipment on December 31, 2024, which requires 6 annual payments of
$36,500 each, beginning December 31, 2024. In addition, Cullumber guarantees the lessor a residual value of $18,700 at the end of
the lease. However, Cullumber believes it is probable that the expected residual value at the end of the lease term will be $9,350. The
equipment has a useful life of 6 years.
Prepare Cullumbers' December 31, 2024, journal entries, assuming the implicit rate of the lease is 10% and this is known to Cullumber.
(List all debit entries before credit entries. Credit account titles are automatically indented when 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 0 decimal places eg. 5,275.)
Click here to view factor tables.
Date
December 31,
2024
December 31,
2024
Account Titles and Explanation
(To record the lease liability)
(To record lease payment)
Debit
Credit
II
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