Complete the missing amount for the above Journal Entries. Eye Deal Optometry le

Question

Complete the missing amount for the above Journal Entries.

Eye Deal Optometry leased vision-testing equlpment from Insight Machines on January 1, 2018. Insight Machines manufactured the equipment at a cost of $290,000 and lists a cash selling price of $333,293. Appropriate adjusting entries are made quarterly. (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1 (Use approprlate factor(s) from the tables provided.) Related Information: Lease term Quarterly lease payments Economic life of asset Interest rate charged by the lesson 5 years (20 quarterly periods) 21,750 at Jan. 1, 2018, and at Mar. 31, June 30, Sept. 3, and Dec. 31 thereafter 5 years 12% Required: 1. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2018, and on March 31, 2018 2. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2018, and on March 31, 2018

Explanation / Answer

ANSWER

no. date journal entries debit credit

1 january1,2018 lease receivable 333293

cost of good sold 290000

sales revenue 333293

equipment 290000

2 january1,2018   cash 21750

lease receivable 21750

3    january1,2018 cash 21750

  lease receivable 11099

interest revenue 10651

note

-lease receivable was calculated in required 1

-cost of good sold was given in question

-only the interest revenue was not there so i will calculate this-

first we have to figure out how much we have a interest so 1st step is to add lease receivable + and the payment which we had begnning of the year that is

333293+21750=355043

and now goona find 3% because remember that we have 12%interest rate for 4 periods so 12/4=3%

355043*3%=10651

thanks.

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