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Problem 21-02 b-f On January 1, 2020, Pina Company contracts to lease equipment for 5 years, agreeing to make a payment of $154,201 at the beginning of each year, starting January 1, 2020. The leased equipment is to be capitalized at $643,000. The asset is to be amortized on a double-declining-balance basis, and the obligation is to be reduced on an effective-interest basis. Pinas incremental borrowing rate is 6%, and the implicit rate in the lease is 10%, which is known by Pina. Title to the equipment transfers to Pina at the end of the lease. The asset has an estimated useful life of 5 years and no residual value. Click here to view factor tables.

Prepare the journal entries that Pina should record on January 1, 2020. (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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit January 1, 2020 enter an account title To record the lease enter a debit amount enter a credit amount enter an account title To record the lease enter a debit amount enter a credit amount (To record the lease.) enter an account title To record lease payment enter a debit amount enter a credit amount enter an account title To record lease payment enter a debit amount enter a credit amount (To record lease payment.) Prepare the journal entries to record amortization of the leased asset and interest expense for the year 2020. (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. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit December 31, 2020 enter an account title To record amortization of the leased asset enter a debit amount enter a credit amount enter an account title To record amortization of the leased asset enter a debit amount enter a credit amount (To record amortization of the leased asset.) December 31, 2020 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Prepare the journal entry to record the lease payment of January 1, 2021, assuming reversing entries are not made. (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. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
January 1, 2021	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

What amounts will appear on the lessees December 31, 2020, balance sheet relative to the lease contract?

PINA COMPANY Balance Sheet (Partial) choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020
Assets
select an opening section name Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsNoncurrent LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' EquityNoncurrent Assets
enter an account title		$enter a dollar amount
Liabilities
select an opening name for section one Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsNoncurrent LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter an account title		$enter a dollar amount
select an opening name for section two Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsNoncurrent LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity
enter an account title		$enter a dollar amount

How would the value of the lease liability in part b change if Pina also agreed to pay the fixed annual insurance on the equipment of $2,000 at the same time as the rental payments? (Round answers to 0 decimal places, e.g. 5,275.)

The lease liability

$enter the lease liability in dollars

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