Question

Exercise 21-9 The following facts pertain to a noncancelable lease agreement between Crane Leasing Company and Cheyenne Company, a lessee. Inception date: May 1, 2017 Annual lease payment due at the beginning of each year, beginning with May 1, 2017 $19,153.46 Bargain-purchase option price at end of lease term $4,300 Lease term 5 years Economic life of leased equipment 10 years Lessor's cost $69,000 Fair value of asset at May 1, 2017 $84,000 Lessor's implicit rate 9% Lessee's incremental borrowing rate The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. The lessee assumes responsibility for all executory costs. Click here to view factor tables Compute the amount of the lease receivable at the inception of the lease. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and Round answers to 2 decimal places, e.g. 16.25.) Lease receivable at inception SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

Answer Page No ① © Lease receivable et inception n = 5 years, 07097 Lease oreceivable and inception = (1715346x4-7119921199 + ($43007 114965 = (19153.46 X 46239719874) + (4300 X 06499313863) = 81205 + 2495 = 84000 1: Lease sreceivable at inception = $84000 @ Lease amortization schedule Interest on lease creceivable -9% previous lease receivable Reduction on unpaid obligation – Annual lease payment plus BPO - interest on lease receivable Lease oueceivable = Previous lease receivable. - reduction on unpaid obligation

Lease Page No 2 Annual lease payment Interest on lease Reduction on Date 1 Plus BPO receivable@ay unpaid obligation receivable 51112017 $84000 5.11.2017 191653:46 $19153.46 $64846.54 51112018 $79153.46 $5836.19 $13317:27 $51529.27 51412019 $19153:46 44637163 $14515.83 $34013:44 511(2020 19153:46 $3331.21 $158220025 $21191.19 51/2011 19153.46 $1904.21 $17246.25 $3944.94 (4/30/2022 $4300 $355.06 $3944.94 $1000673 $1606713 $84000 © Tournal entries On dec 31, 2017 Interest receivable = 5836:19 xham s tery does) $3890.49 On May 1, 2018 Interest revenue = 5836-19-3890.79 = $194504

an dec 31, 2018 Interest receivable = 4637163* Page No ③ =$3091.75 On May 1, 2019 Interest revenue - 4637.63 - 3091.45 = $1545188 On dec 31, 2020 Interest meceivable = 3331121% I patel . Particular 11511+ Lease receivables cost of goods sold To sales To inventory = *222018) Debit . Credit $84000 $69000 $84000 $ 69000 $ 19153.46 Cash $19153:46 31/12/17 $ 3890179 $3890.79 $19153.46 To lease receivable . Interest receivable alc To interest revenue Cash To lease receivable TO interest Geceivable To interest sievenue Interest oteceivable To interest drevenue tt A $13317.27 $ 3890179 $194540 3112118 $3091-45 $3091.75

Page. No 4 Date Credit Debit $19153.46 115119 $14515.83 Particular Сах, To lease receivable To interest receivable 'To interest revenue Interest overcivable ale To interest Mevenue $309175 $1545.88 31112119 $2220.81 $2020.81