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Crane Corporation enters into a 7-year lease of equipment on December 31,2024, which requires 7...

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Accounting

Crane Corporation enters into a 7-year lease of equipment on December 31,2024, which requires 7 annual payments of
$39,500 each, beginning December 31,2024. In addition, Crane guarantees the lessor a residual value of $20,700 at the end of the
lease. However, Crane believes it is probable that the expected residual value at the end of the lease term will be $10,350. The
equipment has a useful life of 7 years.
Prepare Cranes' December 31,2024, journal entries, assuming the implicit rate of the lease is 11% and this is known to Crane. (List all
debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry
is required, select "No Entry" for the account titles and enter 0 for the amounts. For calculation purposes, use 5 decimal places as displayed in the
factor table provided and round final answers to 0 decimal places e.g.5,275.)
Click here to view factor tables.
Date
Account Titles and Explanation
December 31,
2024
Debit
Credit
(To record the lease liability)
December 31,
2024
(To record lease payment)
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