TeamB Company signs a lease agreement dated January 1, 2019, that provides for it to...
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Accounting
TeamB Company signs a lease agreement dated January 1, 2019, that provides for it to lease equipment from Lamba Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows:
The lease is noncancelable and has a term of 5 years.
The annual rentals are $83,222.92, payable at the end of each year, and provide
Lamba with a 12% annual rate of return on its net investment.
There is no renewal or bargain purchase option.
The Present Value factor is 3.604776
TeamB uses the straight-line method to record depreciation on similar equipment.
Required:
Calculate the amount of the asset and liability of TeamB at the inception of the lease. (Round to the nearest dollar.)
Prepare a table summarizing the lease payments and interest expense.
Prepare journal entries on the books of TeamB for 2019.
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