Business, 28.05.2020 05:57 Dianar723

Assume that on December 31, 2019, Simsight Corp. signs an 8-year, non-cancelable lease agreement to lease a machine from Nico Company. The following information pertains to this lease agreement: 1. The agreement requires equal rental payments of $57,464 beginning on December 31, 2019. 2. The fair value of the building on December 31, 2019, is $420,141. 3. The building has an estimated economic life of 10 years, a guaranteed residual value of $8,000, and an expected residual value of $5,600. Simsight depreciates similar machines on the straight-line method. 4. The lease is nonrenewable. At the termination of the lease, the machine reverts to the lessor. 5. Simsight's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Simsight. Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019, 2020, and 2021. Simsight's fiscal year-end is December 31.

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Assume that on December 31, 2019, Simsight Corp. signs an 8-year, non-cancelable lease agreement to...

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