Sh12 On January 1, 2023, Blossom Corp., which uses IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe fromLiu Inc. The following information concerns the lease agreement.1.2.3.4.5.6.The agreement requires equal rental payments of $85,480 beginning on January 1, 2023.The lathe's fair value on January 1, 2023, is $540,000.The lathe has an estimated economic life of 12 years, with an unguaranteed residual value of $15,000. Blossom depreciatessimilar equipment using the straight-line method.The lease is non-renewable. At the termination of the lease, the lathe reverts to the lessor.Blossom's incremental borrowing rate is 11% per year. The lessor's implicit rate is not known by Blossom.The yearly rental payment includes $2,873.90 of executory costs related to insurance on the lathe.Assume this is a manufacturer/dealer lease.Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. (a)Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the right-of-use asset and leaseliability and prepare the initial entry to reflect the signing of the lease agreement. (List all debit entries before credit entries. Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" forthe account titles and enter O for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places,e.g. 5,275.25.)Date Account Titles and Explanation1/1/23DebitCredit

Finance leases and operating leases are the two forms of leases recognized by International…

Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the right-of-use asset and lease liability and prepare the initial entry to reflect the signing of the lease agreement. (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 2 decimal places, e.g. 5,275.25.) Date Account Titles and Explanation 1/1/23 Debit Credit

Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the right-of-use asset and lease liability and prepare the initial entry to reflect the signing of the lease agreement. (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 2 decimal places, e.g. 5,275.25.) Date Account Titles and Explanation 1/1/23 Debit Credit

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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