Stillwater Sports
Stillwater Sports Company Leased Manufacturing Equipment from Premier

question 52

Essay

Stillwater Sports
Stillwater Sports Company leased manufacturing equipment from Premier Leasing on January 1 of the current year. Premier purchased the equipment for $326,189.
Other information:
$$\begin{array} { l l } \text { Lease term } & 4 \text { years } \\\text { Annual Payments } & \$ 90,000 \text { on January } 1 \text { beginning with the current year. } \\\text { Life of Asset } & 4 \text { years } \\\text { Fair value of Asset } & \$ 326,189 \\\text { Implicit interest rate } & 7 \% \\\text { Incremental rate } & 7 \%\end{array}$$
There is no expected residual value or bargain purchase option. Assume that depreciation expense is computed at December 31 of each year.
-Refer to Stillwater Sports:
Required:
1. Prepare appropriate journal entries for Stillwater Sports for the first year.
2. Show how the lease-related information will be presented on Stillwater's balance sheet for the first year.

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Definitions:

Subjective Well-being

Individuals’ personal assessments of their overall happiness or life satisfaction.

Life Satisfaction

A measure of how content an individual is with their life as a whole, encompassing various personal and professional aspects.

Subjective Feelings

Refers to personal experiences of emotions that are unique to the individual and may not be observable by others.

Attractiveness

The quality of being appealing or pleasing in appearance, personality, or characteristics.