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Dodgers Corporation agrees on January 1, 2019, to lease equipment from Philips, Inc. for 3...

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Accounting

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Dodgers Corporation agrees on January 1, 2019, to lease equipment from Philips, Inc. for 3 years. The lease calls for annual lease payments of $14.622 at the beginning of each year. The lease does not transfer ownership, does not contain a bargain purchase option, and is not a specialized asset. In addition, the economic life of the equipment is 10 years. The fair value and cost of the equipment is $60,000. Both companies use straight-line depreciation and no salvage values The appropriate discount rate for the lessee is 10%. The present value of the lease payments is $39.999. (Round to the nearest dollar) On December 31, 2019, the lessee should make a journal entry that includes O debit Lease Liability for $14,622 credit Right-of-Use Asset for $2.538 O debit Lease Expense for $14,622 O debit Interest Expense for $2.538 credit Lease Liability for $25.377

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