Betty Leasing Company signs an agreement on January 1,2025, to lease equipment to Bramble Company....
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Betty Leasing Company signs an agreement on January to lease equipment to Bramble Company. The following information relates to this agreement. The term of the noncancelable lease is years with no renewal option. The equipment has an estimated economic life of years. The fair value of the asset at January is $ The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $ none of which is guaranteed. The agreement requires equal annual rental payments of $ to the lessor, beginning on January The lessee's incremental borrowing rate is The lessor's implicit rate is and is unknown to the lessee. Bramble uses the straightline depreciation method for all equipment. Prepare all of the journal entries for the lessee for to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee's annual accounting period ends on December
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