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Wildhorse Corporation enters into a 5-year lease of equipment on December 31,2024, which requires 5...

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Accounting

Wildhorse Corporation enters into a 5-year lease of equipment on December 31,2024, which requires 5 annual payments of $39,200 each, beginning December 31,2024. In addition, Wildhorse guarantees the lessor a residual value of $21,100 at the end of the lease. However, Wildhorse believes it is probable that the expected residual value at the end of the lease term will be $10,550. The equipment has a useful life of 5 years. Prepare Wildhorses' December 31,2024 journal entries assuming the implicit rate of the lease is 9% and this is known to Wildhorse.

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