Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025. (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 0 for the amounts. Round answers to 0 decimal places, eg. 5,275. List all debit entries before credit entries) Date Account Titles and Explanation cember 2025 cember 2025 Amortization Expense Right-of-Use Asset (To record amortization of the leased asset.) Interest Expense Lease Liability (To record interest on lease payment.) Debit Credit 11 11

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2025, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $128,104 at the
beginning of each year, starting January 1, 2025. The leased equipment is to be capitalized at $572,000. The asset is to be amortized
on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport's incremental
borrowing rate is 7%, and the implicit rate in the lease is 6%, which is known by Bridgeport. Title to the equipment transfers to
Bridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.
Transcribed Image Text:On January 1, 2025, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a payment of $128,104 at the beginning of each year, starting January 1, 2025. The leased equipment is to be capitalized at $572,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Bridgeport's incremental borrowing rate is 7%, and the implicit rate in the lease is 6%, which is known by Bridgeport. Title to the equipment transfers to Bridgeport at the end of the lease. The asset has an estimated useful life of 5 years and no residual value.
Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025. (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 0 for the amounts. Round answers to 0 decimal places, eg. 5,275. List all debit entries before credit entries.)
Date Account Titles and Explanation
cember
2025
cember
2025
Amortization Expense
Right-of-Use Asset
(To record amortization of the leased asset.)
Interest Expense
Lease Liability
(To record interest on lease payment.)
Debit
Credit
Transcribed Image Text:Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2025. (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 0 for the amounts. Round answers to 0 decimal places, eg. 5,275. List all debit entries before credit entries.) Date Account Titles and Explanation cember 2025 cember 2025 Amortization Expense Right-of-Use Asset (To record amortization of the leased asset.) Interest Expense Lease Liability (To record interest on lease payment.) Debit Credit
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