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On January 1, 2023, Bramble Ltd. entered into an agreement to lease a truck from Wildhorse Ltd. Both Bramble and Wildhorse use IFRS. The details of the agreement are as follows: Additional information: 1. There are no abnormal risks associated with the collection of lease payments from Bramble. 2. There are no additional unreimbursable costs to be incurred by Wildhorse in connection with the leased truck. 3. At the end of the lease term, Wildhorse sold the truck to a third party for $3,085, which was the truck's fair value at December 31, 2025. Bramble paid Wildhorse the difference between the residual value guarantee of $3,440 and the proceeds obtained on the resale. 3. At the end of the lease term, Wildhorse sold the truck to a third party for $3,085, which was the truck's fair value at December 31, 2025. Bramble paid Wildhorse the difference between the residual value guarantee of $3,440 and the proceeds obtained on the resale. 4. Bramble knows the interest rate that is implicit in the lease. 5. Bramble knows the amount of executory costs included in the minimum lease payments. 6. Bramble uses straight-line depreciation for its trucks with the residual value guarantee of $3,440 for the leased truck. (a) Your answer is partially correct. Prepare the journal entries that Wildhorse would make on January 1, 2023, and the adjusting journal entries at December 31, 2023 , to record the annual interest income from the lease arrangement, assuming that Wildhorse has a December 31 fiscal year end. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Jan. 1, 2023 Cash Lease Receivable Equipment Acquired for Lessee Unearned Interest Income Dec. 31, 2023 Debit Credit Lease Receivable Unearned Interest Income Interest Income On January 1, 2023, Bramble Ltd. entered into an agreement to lease a truck from Wildhorse Ltd. Both Bramble and Wildhorse use IFRS. The details of the agreement are as follows: Additional information: 1. There are no abnormal risks associated with the collection of lease payments from Bramble. 2. There are no additional unreimbursable costs to be incurred by Wildhorse in connection with the leased truck. 3. At the end of the lease term, Wildhorse sold the truck to a third party for $3,085, which was the truck's fair value at December 31, 2025. Bramble paid Wildhorse the difference between the residual value guarantee of $3,440 and the proceeds obtained on the resale. 3. At the end of the lease term, Wildhorse sold the truck to a third party for $3,085, which was the truck's fair value at December 31, 2025. Bramble paid Wildhorse the difference between the residual value guarantee of $3,440 and the proceeds obtained on the resale. 4. Bramble knows the interest rate that is implicit in the lease. 5. Bramble knows the amount of executory costs included in the minimum lease payments. 6. Bramble uses straight-line depreciation for its trucks with the residual value guarantee of $3,440 for the leased truck. (a) Your answer is partially correct. Prepare the journal entries that Wildhorse would make on January 1, 2023, and the adjusting journal entries at December 31, 2023 , to record the annual interest income from the lease arrangement, assuming that Wildhorse has a December 31 fiscal year end. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Jan. 1, 2023 Cash Lease Receivable Equipment Acquired for Lessee Unearned Interest Income Dec. 31, 2023 Debit Credit Lease Receivable Unearned Interest Income Interest Income

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