LeBron James LBJ Corporation agrees on January to lease equipment from Cullumber, Inc. for years. The lease calls for
annual lease payments of $ at the beginning of each year. The lease does not transfer ownership, nor does it contain a bargain
purchase option, and is not a specialized asset. In addition, the useful life of the equipment is years, and the present value of the
lease payments is less than of the fair value of the equipment.
Prepare LBJs journal entries on January commencement of the operating lease and on December Assume the
implicit rate used by the lessor is unknown, and LBJs incremental borrowing rate is 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.
List all debit entries before credit entries. For calculation purposes, use decimal places as displayed in the factor table provided and round final
answers to decimal places, eg Record journal entries in the order presented in the problem.
Click here to view factor tables.
To record lease liability
To record lease payment
