This is a multiple answer question meaning the correct answer could be one or more of the choices below. On January 1, 2024, Wingham Company leased equipment from Earnest Leasing Company. The cost and fair value of the equipment is $200,000. The present value of the lease payments is $120,000. The lease qualifies as an operating lease. When the lease is executed, Wingham should: A. credit lease payable for $200,000 B. debit right-of-use asset for $120,000 C. debit right-of-use asset for $200,000 OD. credit residual asset liability for $80,000 O E. credit lease payable for $120,000
This is a multiple answer question meaning the correct answer could be one or more of the choices below. On January 1, 2024, Wingham Company leased equipment from Earnest Leasing Company. The cost and fair value of the equipment is $200,000. The present value of the lease payments is $120,000. The lease qualifies as an operating lease. When the lease is executed, Wingham should: A. credit lease payable for $200,000 B. debit right-of-use asset for $120,000 C. debit right-of-use asset for $200,000 OD. credit residual asset liability for $80,000 O E. credit lease payable for $120,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:This is a multiple answer question meaning the correct answer could be one or more of the choices below.
On January 1, 2024, Wingham Company leased equipment from Earnest Leasing Company. The cost and fair value of the equipment is $200,000. The present value of the lease payments is
$120,000. The lease qualifies as an operating lease. When the lease is executed, Wingham should:
A. credit lease payable for $200,000
B. debit right-of-use asset for $120,000
C. debit right-of-use asset for $200,000
OD. credit residual asset liability for $80,000
O E. credit lease payable for $120,000
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