QUESTION 15 2 points Save Answe Terms of a lease agreement and related facts are

Question

QUESTION 15 2 points Save Answe Terms of a lease agreement and related facts are: a. Leased asset has a retail cash selling price of $200,000. its useful life is six years b. Annual lease payments at the beginning of each year are $41,746, beginning January 1. The lease term is six years. C. Lessors interest rate when calculating annual lease payments was 9% d. Direct costs by the lessor of legal and commissions to execute the completed lease are $4,124 Required Round your answers to the nearest whole dollar amounts. Prepare the appropriate journal entries for the lessor to record the lease, the initial lease payment at its commencement, and at the December 31 fiscal year-end under each of the following two independent assumptions 1. The lessor recently paid $200.000 to acquire the asset 2. The lessor recently paid $170,000 to acquire the asset T TT Arial

Explanation / Answer

1 01-Jan Lease receivable       200,000 Equipment    200,000 Lease receivable            4,124 Cash         4,124 Cash          41,746 Lease receivable      41,746 31-Dec Interest receivable          14,614 Interest revenue      14,614 (200000+4124-41746)*9% 2 01-Jan Lease receivable       200,000 Sales    200,000 Cost of goods sold       170,000 Equipment    170,000 Selling expense            4,124 Cash         4,124 Cash          41,746 Lease receivable      41,746 31-Dec Interest receivable          11,543 Interest revenue      11,543 (170000-41746)*9%

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