Question

Rick Kleckner Corporation recorded a right-of-use asset for $300,000 as a result of a finance lease on December 31, 2019. Kleckner's incremental borrowing rate is 8%, and the implicit rate of the lessor was not known at the commencement of the lease. Kleckner made the first lease payment of $48,337 on on December 31, 2019. The lease requires 8 annual payments. The equipment has a useful life of 8 years with no residual value. Prepare Kleckner's December 31, 2020, entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record interest expense) December 31, 2020 (To record amortization of the right-of-use asset)

Answer 1

Date Debit 20133 2020 Account Titus and Explanation Interest expense Interest Payable (To record interest expense) 20133 DU:31 2020 37500 37500 Depreciation expense ! Accuenellated depreciation Building ( To record amortization of the right of- Use assel)