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Prepare Oriole's January 1, 2023 journal entries at the inception of the lease and the entry at December 31, 2023, to record interest.

Prepare Oriole's January 1, 2023 journal entries at the inception of the lease and the entry at December 31, 2023, to record interest.

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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Not a graded assignment!!!. Please fill out each box in the journal entry. 

Oriole Corporation, which uses ASPE, leased equipment it had manufactured at a cost of $128,100 for Sheridan, the lessee. The equipment's regular selling price is $163,000. The term of the lease is 12 years, beginning January 1, 2023, with equal rental payments of $23,495 at the beginning of each year. Sheridan pays all executory costs directly to third parties. The equipment's fair value at the lease's inception is $163,000. The equipment has a useful life of seven years with no residual value. The lease has an implicit interest rate of 12%, no bargain purchase option, and no transfer of title. Collectibility is reasonably assured, with no additional costs to be incurred by Oriole. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare Oriole's January 1, 2023 journal entries at the inception of the lease and the entry at December 31, 2023, to record interest. (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 factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation (To record inception of lease) (To record cost of goods sold) (Collection of first lease payment) (To record interest income) Debit Credit
Transcribed Image Text:Oriole Corporation, which uses ASPE, leased equipment it had manufactured at a cost of $128,100 for Sheridan, the lessee. The equipment's regular selling price is $163,000. The term of the lease is 12 years, beginning January 1, 2023, with equal rental payments of $23,495 at the beginning of each year. Sheridan pays all executory costs directly to third parties. The equipment's fair value at the lease's inception is $163,000. The equipment has a useful life of seven years with no residual value. The lease has an implicit interest rate of 12%, no bargain purchase option, and no transfer of title. Collectibility is reasonably assured, with no additional costs to be incurred by Oriole. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare Oriole's January 1, 2023 journal entries at the inception of the lease and the entry at December 31, 2023, to record interest. (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 factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation (To record inception of lease) (To record cost of goods sold) (Collection of first lease payment) (To record interest income) Debit Credit
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