The details of the equipment lease agreement that Taj Corp. (lessee) recently entered into with Stanger Leasing (lessor) are: Commencement date: January 1, 2019. Term of lease: 12 months. Payments: $1,000 per month first due at the commencement date. Other: Title does not transfer and the lease does not include any renewal or purchase options. Interest rate implicit in the lease: Lessee not able to readily determine. Incremental borrowing rate: 9% per annum (0.75% per month). Estimated useful life of equipment: 8 years. Depreciation method: Straight-line. Year end: December 31. Assume that Taj Corp. does elect to expense leases of a short-term nature as a practical expedient. Prepare the journal entry for January 1, 2019. Indicate a debit as positive and a credit as negative. Type 0 for any blanks that do not apply.

The details of the equipment lease agreement that Taj Corp. (lessee) recently entered into with Stanger Leasing (lessor) are: Commencement date: January 1, 2019. Term of lease: 12 months. Payments: $1,000 per month first due at the commencement date. Other: Title does not transfer and the lease does not include any renewal or purchase options. Interest rate implicit in the lease: Lessee not able to readily determine. Incremental borrowing rate: 9% per annum (0.75% per month). Estimated useful life of equipment: 8 years. Depreciation method: Straight-line. Year end: December 31. Assume that Taj Corp. does elect to expense leases of a short-term nature as a practical expedient. Prepare the journal entry for January 1, 2019. Indicate a debit as positive and a credit as negative. Type 0 for any blanks that do not apply.

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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