Windsor Company leased equipment from Costner Company, beginning on December 31, 2024. The lease term is 4 years and requires equal rental payments of $87,122 at the beginning of each year of the lease, starting on the commencement date (December 31, 2024). The equipment has a fair value at the commencement date of the lease of $320,000, an estimated useful life of 4 years, and no estimated residual value. The appropriate interest rate is 6%. Click here to view factor tables. Prepare Windsor's 2024 and 2025 journal entries, assuming Windsor depreciates similar equipment it owns on a straight-line basis. (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. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 12/31/24 12/31/25 (To record lease liability) (To record lease payment) (To record lease payment) (To record amortization of the right-of-use asset) Debit Credit
Windsor Company leased equipment from Costner Company, beginning on December 31, 2024. The lease term is 4 years and requires equal rental payments of $87,122 at the beginning of each year of the lease, starting on the commencement date (December 31, 2024). The equipment has a fair value at the commencement date of the lease of $320,000, an estimated useful life of 4 years, and no estimated residual value. The appropriate interest rate is 6%. Click here to view factor tables. Prepare Windsor's 2024 and 2025 journal entries, assuming Windsor depreciates similar equipment it owns on a straight-line basis. (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. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 12/31/24 12/31/25 (To record lease liability) (To record lease payment) (To record lease payment) (To record amortization of the right-of-use asset) Debit Credit
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10GI: Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6...
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Transcribed Image Text:Windsor Company leased equipment from Costner Company, beginning on December 31, 2024. The lease term is 4 years and requires
equal rental payments of $87,122 at the beginning of each year of the lease, starting on the commencement date (December 31,
2024). The equipment has a fair value at the commencement date of the lease of $320,000, an estimated useful life of 4 years, and no
estimated residual value. The appropriate interest rate is 6%.
Click here to view factor tables.
Prepare Windsor's 2024 and 2025 journal entries, assuming Windsor depreciates similar equipment it owns on a straight-line basis.
(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. For calculation purposes, use 5 decimal places as
displayed in the factor table provided and round final answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in
the problem.)
Date
Account Titles and Explanation
12/31/24
12/31/25
(To record lease liability)
(To record lease payment)
(To record lease payment)
(To record amortization of the right-of-use asset)
Debit
Credit
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