Assume that on January 1, 2017, Kimberly-Clark Corp. signs a10-year noncancelable lease agreement to...

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Accounting

Assume that on January 1, 2017, Kimberly-Clark Corp. signs a10-year noncancelable lease agreement to lease a storage buildingfrom Sheffield Storage Company. The following information pertainsto this lease agreement.
1. The agreement requires equal rental payments of $76,100beginning on January 1, 2017.
2. The fair value of the building on January 1, 2017 is$414,000.
3. The building has an estimated economic life of 12 years, withan unguaranteed residual value of $9,700. Kimberly-Clarkdepreciates similar buildings on the straight-line method.
4. The lease is nonrenewable. At the termination of the lease,the building reverts to the lessor.
5. Kimberly-Clark’s incremental borrowing rate is 12% per year.The lessor’s implicit rate is not known by Kimberly-Clark.
6. The yearly rental payment includes $10,679 of executory costsrelated to taxes on the property.
Prepare the journal entries on the lessee’s books to reflect thesigning of the lease agreement and to record the payments andexpenses related to this lease for the years 2017 and 2018.Kimberly-Clark’s corporate year-end is December 31. (Hint: Do thetable for ten periods based on present value of minimum leasepayments.) (Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry is required,select "No Entry" for the account titles and
(To record the lease.) (To record first payment.)(To recorddepreciation.)(To record interest.)(To record second payment.)(Torecord depreciation.)(To record interest.)

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Prepare the journal entries as follows Date Account Title and Explanation Debit Credit 112017 Leased building 414000 Lease liability 414000 To record capital lease liability 112017 Executory costs 10679 Lease lability 65421 Cash 76100 To record annual rental paid 12312017 See Answer

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In: AccountingAssume that on January 1, 2017, Kimberly-Clark Corp. signs a10-year noncancelable lease agreement to lease...Assume that on January 1, 2017, Kimberly-Clark Corp. signs a10-year noncancelable lease agreement to lease a storage buildingfrom Sheffield Storage Company. The following information pertainsto this lease agreement.1. The agreement requires equal rental payments of $76,100beginning on January 1, 2017.2. The fair value of the building on January 1, 2017 is$414,000.3. The building has an estimated economic life of 12 years, withan unguaranteed residual value of $9,700. Kimberly-Clarkdepreciates similar buildings on the straight-line method.4. The lease is nonrenewable. At the termination of the lease,the building reverts to the lessor.5. Kimberly-Clark’s incremental borrowing rate is 12% per year.The lessor’s implicit rate is not known by Kimberly-Clark.6. The yearly rental payment includes $10,679 of executory costsrelated to taxes on the property.Prepare the journal entries on the lessee’s books to reflect thesigning of the lease agreement and to record the payments andexpenses related to this lease for the years 2017 and 2018.Kimberly-Clark’s corporate year-end is December 31. (Hint: Do thetable for ten periods based on present value of minimum leasepayments.) (Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry is required,select "No Entry" for the account titles and(To record the lease.) (To record first payment.)(To recorddepreciation.)(To record interest.)(To record second payment.)(Torecord depreciation.)(To record interest.)