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Skysong Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Sheridan Company. The te
Prepare the journal entries on the books of Skysong Leasing to reflect the payments received under the lease and to recognize
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Fair Value $ 322,000
Less: PV of Residual value (23500*0.90703) $   21,315
PV of lease payments $ 300,685
Annual Lease payment (300684.8/1.85941) $ 161,710
Date Account Title and Explanation Debit Credit
01-01-2020 Lease Receivable $ 322,000
Cost of Goods Sold (270000-21315) 248685
     Sales $ 300,685
         Equipment 270000
12-31-2020 Cash $ 161,710
     Lease Receivable $ 145,610
     Interest Revenue (322000*5%) $   16,100
12-31-2021 Cash $ 161,710
     Lease Receivable $ 152,890
     Interest Revenue ((322000-145610)*5%) $     8,820
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