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 |
Skysong Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to...
Skysong Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Sheridan Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Sheridan has the option to purchase the equipment for $23,500 upon termination of the lease. It is not reasonably certain that Sheridan will exercise this option 2. The equipment has a cost of $270,000 and...
Kingbird Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Blossom Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Blossom has the option to purchase the equipment for $26,000 upon termination of the lease. It is not reasonably certain that Blossom will exercise this option. 2. The equipment has a cost of $320,000 and...
Castle Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Jan Way Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Jan Way has the option to purchase the equipment for $16,000 upon termination of the lease. It is not reasonably certain that Jan Way will exercise this option. 2. The equipment has a cost...
Metlock Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Ivanhoe Company. The term of the non- cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Ivanhoe has the option to purchase the equipment for $22,000 upon termination of the lease. It is not reasonably certain that Ivanhoe will exercise this option. 2. The equipment has a cost of $240,000...
Kingbird Leasing Company signs a lease agreement on January 1, 2020, to lease electronic equipment to Blossom Company. The term of the non- cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Blossom has the option to purchase the equipment for $15,000 upon termination of the lease. It is not reasonably certain that Blossom will exercise this option. 2. The equipment has a cost of $100,000...
Marin Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Cullumber Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. Cullumber has the option to purchase the equipment for $27,000 upon termination of the lease. It is not reasonably certain that Cullumber will exercise this option. 2. The equipment has a cost of $340,000 and...
Castle Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Jan Way Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: Jan Way has the option to purchase the equipment for $16,000 upon termination of the lease. It is not reasonably certain that Jan Way will exercise this option. 1. 2. The equipment has a cost...
Exercise 21A-6 a-b Kingbird Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Blossom Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement 1. Blossom has the option to purchase the equipment for $20,500 upon termination of the lease. It is not reasonably certain that Blossom will exercise this option. The equipment has a cost of...
Skysong Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 6 years with no renewal option. The equipment has an estimated economic life of 6 years. 2. The cost of the asset to the lessor is $401,000. The fair value of the asset at January 1, 2017, is $401,000. 3. The asset will revert to the lessor at the...
Exercise 21A-6 a-b (Part Level Submission) Shamrock Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Pharoah Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: 1. 2. 3. 4. Pharoah has the option to purchase the equipment for $23,000 upon termination of the lease. It is not reasonably certain that Pharoah will exercise this option....