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Exercise 117 On January 1, 2018, Hester Co. sells equipment to Beck Corp. at its fair value of $719,800 and leases it back. The equipment had a carrying value of $629,700, the lease is for 10 years and the implicit rate is 10 %. The lease payments of $109,400 start on January 1, 2018. Hester uses straight-line depreciation and there is no residual value Prepare all of Hester's entries for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2018 (To record sale) January 1, 2018 (To record lease) January 1, 2018 (To record first lease payment) December 31, 2018 (To record depreciation) December 31, 2018 (To record amortization of profit on sale) December 31, 2018 (To record interest payment) Prepare all of Beck's entries for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Date Credit January 1, 2018 (To record purchase) January 1, 2018 (To record the leaseback) January 1, 2018 (To record receipt of the first lease payment) December 31, 2018 Click if you would like to Show Work for this question: Open Show Work Exercise 117 On January 1, 2018, Hester Co. sells equipment to Beck Corp. at its fair value of $719,800 and leases it back. The equipment had a carrying value of $629,700, the lease is for 10 years and the implicit rate is 10 %. The lease payments of $109,400 start on January 1, 2018. Hester uses straight-line depreciation and there is no residual value Prepare all of Hester's entries for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2018 (To record sale) January 1, 2018 (To record lease) January 1, 2018 (To record first lease payment) December 31, 2018 (To record depreciation) December 31, 2018 (To record amortization of profit on sale) December 31, 2018 (To record interest payment) Prepare all of Beck's entries for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Date Credit January 1, 2018 (To record purchase) January 1, 2018 (To record the leaseback) January 1, 2018 (To record receipt of the first lease payment) December 31, 2018 Click if you would like to Show Work for this question: Open Show Work

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