CALCULA 10, MESSAGE NY INSTRUCTOR FULL SCREEN K PRINTER VERSION BACK Brief Exerc

Question

CALCULA 10, MESSAGE NY INSTRUCTOR FULL SCREEN K PRINTER VERSION BACK Brief Exercise 21-6 Assume that 1BM leased equipment that was carried at a cost of $148,000 to Sharon Swander Company, The term of the lease is 5 years beginning January 1, 2017, with equal rental payments of $34,908 at the begianing of each year. All executory costs are paid by Swander directly to third parties. The fair value of the equipment at the inception of the lease is $148,000. The equipment has a useful life of 5 vears with no savage valie. Tha leas se has an implicit interest rate of 9%, no bargain purchase option, and no transfer of title. Collectibility is reasonably assured with no additional cost to be incurred bye M. Prepare 1BM's January 1, 2017, Journal entries at the inception of the lease. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to o decimal places e.g. 58,971) es Date Account Titles and Explanations Debit Credit anuary 1, 2017 (To record the lease.) January 1, 2017 (To record fwst lease payment) Click if you would like to Show Work for this question: Show Wark L3STOE Accounts

Explanation / Answer

Date Account titles & explanation Debit Credit 1-Jan-17 Lease Receivable 148,000 Equipment 148,000 (to record the lease) 1-Jan-17 Cash 34,908 Lease Receivable 34,908 (to record the fisrt lease payment)

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