Question

8:16 POO. Compute the amount of the lease receivable. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to decimal places eg. 5,275.) T o and Media Prepare all necessary journal entries for Sunland for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places eg. 5,275.) Date Accounted BED Suppose the collectibility of the lease payments was not probable for Sunland, Prepare the necessary journal entry for the company in 2020. (Credit account tities are automatically indented when amount is entered. Do not indent manually.) Det er lendo Suppose at the end of the lease term, Sunland receives the asset and determines that it actually has a fair value of $1,250 instead of the anticipated residual value of SO. Record the entry to recognize the receipt of the asset for Sunland at the end of the lease term. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to decimal places eg. 5,275.) De les de

Sunland Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $31,600 at the beginning of each year. The first payment is received on January 1, 2020. Sunland had purchased the machine during 2016 for $101,000. Collectibility of lease payments by Sunland is probable. Sunland set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Sunland at the termination of the lease.

Answer 1

a)
Amount of lease Recivables
Annual Payments	31600
x PVAD (6%,8)	$6.5824
Amt of lease receivables	$ 208,003.25
b)
General Journal	Debit	Credit
Lease Receivable	$ 208,003.25
Cost of good sold	$ 101,000.00
Sales		$ 208,003.25
Inventory		$ 101,000.00
Cash	31600
Lease Receivable		31600
Interest Receivable ($208,003.25 - 31600 ) x 6%	$   10,584.20
Interest Revenue		$   10,584.20
c)
Cash	31600
Deposit Liability		31600
d)
Cash	1250
Lease Receivables		1250