Record the journal entries Gold Inc would make on January

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Question - On January 1, 20X1 Gold Inc. leased some new equipment for a term of 7 years. The equipment's expected life is 10 years (salvage value = 0) and it has a fair market value of $2,250,000. The lease arrangement has no transfer of ownership, but does have a bargain purchase option for $80,000. The contract requires annual lease payments (beginning of year payments) of $325,000. The incremental borrowing rate for Gold Inc. is 5.5% and the lessor's implicit rate of interest is 4%. Record the journal entries (accounts and amounts) Gold Inc. would make on January 1, 20X1.

Reference no: EM132766748

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